<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 1997.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 33-82444
MID-MISSOURI HOLDING COMPANY, INC.
----------------------------------
(Exact Name of Registrant as Specified in Its Charter)
MISSOURI 43-1676881
-------- ----------
(State or Other Jurisdiction of Incorporation (I.R.S. Employer
or Organization) Identification No.)
318 WEST MAIN STREET, SULLIVAN, MISSOURI 63080
- ------------------------------------------ --------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (573) 468-3191
----------------
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
------------------- -------------------
NONE NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $10.00 PAR VALUE
(Title of Class)
______________________________
Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes ____ No X
----
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]
Issuer's revenues for fiscal year 1997 were $10,615,058.
There is no established trading market for shares of the voting stock of
the Registrant. To the best knowledge of the Registrant, transfers that have
occurred in such stock primarily relate to estate planning transactions.
Management of the Registrant has no knowledge of the prices used in or the
values assigned to such transfers. At March 1, 1998, the aggregate book value
of the Registrant's voting stock held by non-affiliates was approximately
$13,323,000.
There were 231,361 shares of common stock of the Registrant outstanding as
of March 1, 1998.
DOCUMENTS INCORPORATED BY REFERENCE
None.
Transitional Small Business Disclosure Format (check one):
Yes ___________ No X
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PART I
------
ITEM 1. DESCRIPTION OF BUSINESS
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(a) General
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Mid-Missouri Holding Company, Inc. (hereinafter referred to from time to
time as the "Registrant" or "Mid-Missouri") was incorporated under the laws of
the State of Missouri on December 30, 1993, at the direction of the board of
directors of Bank of Sullivan, a Missouri banking corporation chartered under
the laws of the State of Missouri on April 1, 1895 (the "Bank"), for the purpose
of serving as a one-bank holding company for the Bank. The Registrant's
principal office is located at 318 West Main Street, Sullivan, Missouri 63080,
which location is also the main office of the Bank.
On August 4, 1994, the Registrant filed with the Securities and Exchange
Commission (the "S.E.C.") a Registration Statement on Form S-4 (the "1994
Registration Statement") containing a Prospectus and Exchange Offer (the
"Exchange Offer") of Mid-Missouri to acquire at least 95% and up to 100% of the
issued and outstanding shares of common stock, par value $100.00 per share, of
the Bank (the "Bank Common Stock"). The 1994 Registration Statement was
declared effective by the S.E.C. on August 23, 1994, and the Exchange Offer was
consummated on May 3, 1995. Pursuant to the terms of the Exchange Offer, each
share of Bank Common Stock, at closing, was exchanged for ten (10) shares of
common stock, $10.00 par value per share, of Mid-Missouri (the "Mid-Missouri
Common Stock"). As a result, shareholders of the Bank received shares of Mid-
Missouri Common Stock substantially in proportion to their respective ownership
of Bank Common Stock. Mid-Missouri acquired substantially all of the issued and
outstanding shares of Bank Common Stock as a result of the Exchange Offer.
On March 25, 1997, the Registrant filed with the S.E.C. a Registration
Statement on Form S-4 (the "1997 Registration Statement") containing a
Prospectus of Mid-Missouri to acquire up to 100% of the issued and outstanding
shares of common stock, par value $1.00 per share, of American Federal Savings &
Loan Association of Sullivan, a Federal savings and loan association ("American
Federal") (the "American Federal Common Stock"), through the merger (the
"Merger") of American Federal with and into the Bank, with the Bank surviving
under its Charter. The 1997 Registration Statement was declared effective by
the S.E.C. on May 15, 1997, and the Merger was consummated on June 30, 1997.
Pursuant to the terms of the Merger, each share of American Federal Common
Stock, at closing, was exchanged for 0.206494 shares of Mid-Missouri Common
Stock plus $14.7415 cash. Mid-Missouri acquired all of the issued and
outstanding shares of American Federal Common Stock as a result of the Merger.
As a result of the Merger, Mid-Missouri retained beneficial ownership of all of
the issued and outstanding stock of the Bank, and the separate corporate
existence of American Federal ceased.
The business of the Registrant consists primarily of the ownership,
supervision and control of the Bank. The Registrant provides the Bank with
advice, counsel and specialized services in various fields of financial and
banking policy and operations, including auditing, record keeping, tax planning,
trust operations, new business development, lending, regulatory compliance and
human resources management. The responsibility for the management of the Bank
remains with the officers and directors of the Bank. At December 31, 1997, Mid-
Missouri had 10 officers and no full-time employees. Mid-Missouri utilizes, to
the extent necessary, the officers, employees and services of the Bank.
The Bank, which operated 3 banking offices in Missouri during 1997, is
engaged in the general banking business of accepting funds for deposit, making
loans, renting safe deposit boxes and performing such other banking services as
are usual and customary in banks of similar size and character. Bank offers
residential real estate loans, commercial and business loans, and consumer
loans. Bank customers are offered regular checking, interest-bearing checking,
money market, savings, certificates of deposit and IRA accounts.
The Bank serves customers in Sullivan, Missouri, where its principal
banking office is located, and in surrounding areas. The Bank competes with
numerous financial institutions, including banks located in the area surrounding
Sullivan, Missouri. The Bank is competitive with all competing financial
institutions in its service area with respect to interest paid on time and
savings deposits, service charges on deposit accounts and interest rates charged
on loans. At December 31, 1997, the Bank employed 56 full-time employees and 8
part-time employees.
1
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(b) Supervision and Regulation
--------------------------
As a Missouri business corporation, Mid-Missouri is subject to regulation
by the Secretary of State of the State of Missouri and to the requirements of
The General and Business Corporation Law of Missouri. As a bank holding company
within the meaning of the Bank Holding Company Act of 1956, as amended (the
"BHCA"), Mid-Missouri is subject to regulation, supervision and examination by
the Board of Governors of the Federal Reserve System (the "Federal Reserve
Board"). Registered bank holding companies are required to file an annual
report with the Federal Reserve Board and to provide the Federal Reserve Board
with such additional information as the Federal Reserve Board may require
pursuant to the BHCA.
The BHCA requires that bank holding companies obtain prior approval from
the Federal Reserve Board before (1) acquiring (except in certain limited
circumstances) direct or indirect ownership or control of more than 5% of the
voting shares of any bank or bank holding company, (2) acquiring all or
substantially all of the assets of any bank or bank holding company, or (3)
merging or consolidating with any other bank holding company. In determining
whether to approve a proposed acquisition, merger or consolidation, the Federal
Reserve Board is required to take into consideration the financial and
managerial resources and future prospects of the company or companies and the
banks concerned, and the convenience and needs of the community to be served.
The BHCA also prohibits any bank holding company, or any subsidiary
thereof, from acquiring, directly or indirectly, more than 5% of the voting
shares of, interest in, or all or substantially all of the assets of any
additional bank located outside the state in which the operations of such bank
holding company's banking subsidiaries were principally conducted on the date
which such company became a bank holding company unless the acquisition of such
shares or assets of a state bank by an out-of-state bank holding company is
specifically authorized by the statutes of the state in which the bank is
located. Missouri law permits banks and bank holding companies in states
contiguous to Missouri to acquire banks and bank holding companies located in
Missouri, if such states have passed reciprocal interstate banking laws. A bank
or bank holding company having its principal operations in Iowa, Illinois,
Kentucky, Tennessee, Arkansas, Oklahoma, Kansas or Nebraska is currently
permitted to acquire control of Missouri banks since all of the states listed
above have adopted regional or national interstate banking legislation
reciprocal with that of Missouri.
Missouri law provides that a bank holding company may not obtain control of
any bank if as a result of the acquisition, the total deposits in such bank
together with the total deposits of all banks located in the State of Missouri
controlled by the bank holding company would exceed 13% of the total deposits of
all depository financial institutions in the state, including banks, thrifts and
credit unions. In computing the total deposits in all banks controlled by the
bank holding company and the bank which the holding company seeks to acquire,
certificates of deposit in the face amount of $100,000 or more, deposits from
sources outside the United States and deposits of banks other than banks
controlled by the bank holding company are to be deducted.
The BHCA further prohibits a bank holding company, with certain exceptions,
from engaging in and from acquiring direct or indirect ownership or control of
more than 5% of the voting shares of any company engaged in a business other
than that of banking, managing and controlling banks, or furnishing services to
its affiliated banks. An exception to this prohibition provides that a bank
holding company may engage in, and may own shares of companies engaged in,
certain businesses which the Federal Reserve Board has determined to be so
closely related to banking as to be a proper incident thereto. The Federal
Reserve Board has adopted regulations specifying areas of activity which it
regards as so closely related to banking or the managing of banks as to be
permissible for bank holding companies under the law, subject to Board approval
in individual cases. The Registrant is not engaged in any such non-banking
activities.
In September 1994, the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994 was enacted. As of September 29, 1995, bank holding
companies have the right to expand, by acquiring existing banks, into all
states, even those which had theretofore restricted entry, subject to state
deposit caps and a 10% nationwide deposit cap. This legislation also provides
that, subject to future action by individual states, a holding company has the
right, commencing on June 1, 1997, to convert the banks which it owns in
different states to branches of a single bank. States are permitted to "opt
out" of this full interstate branching provision prior to the effective date,
but may not "opt out" of the law allowing bank holding companies from other
states to enter such states. Alternatively, states may "opt in" earlier than
June 1, 1997. As of the date hereof, the state of Missouri, in which all of the
Registrant's subsidiary banks are located, has neither "opted in" nor "opted
out" of the interstate branching provisions of this legislation.
2
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Subsidiary banks of a bank holding company are subject to certain
restrictions imposed by the Federal Reserve Act on any extensions of credit to
the bank holding company or any of its other subsidiaries, on investments in the
stock or other securities thereof, and on the taking of such stock or securities
as collateral for loans to any borrower. Further, under the BHCA and
regulations of the Federal Reserve Board, a bank holding company and its
subsidiaries are prohibited from engaging in certain tie-in arrangements in
connection with any extension of credit, lease or sale of property, or
furnishing of services.
The Bank is the primary subsidiary of the Registrant. The Bank is a
Missouri state chartered bank and, as such, its primary bank regulatory
authorities are the Missouri Division of Finance and the Federal Deposit
Insurance Corporation. Banks organized under state law which are members of the
Federal Reserve System are regulated and examined primarily by the Federal
Reserve Board and state banking authorities, while banks organized under state
law which are not members of the Federal Reserve System are regulated and
examined primarily by the Federal Deposit Insurance Corporation and state
banking authorities. The Bank is a state-chartered bank which is not a member
of the Federal Reserve System. Regulation by the federal and state banking
authorities is designed to protect depositors rather than shareholders.
Dividends from the Bank are the principal source of revenue to the
Registrant although management fees may be charged to cover services rendered to
the Bank. The ability of the Bank to pay such dividends to Mid-Missouri is
subject to limitations established by various state and federal laws and
regulations. Under Missouri law, a state-chartered bank which is not a member
of the Federal Reserve System whose surplus account for each dividend period
does not equal at least 40% of the amount of its capital stock is required to
transfer to its surplus account 10% of its net income for such dividend period.
Retained earnings in excess of any such required transfer to surplus are
available for dividends. In addition, sound banking practices require the
maintenance of adequate levels of capital. Federal regulatory authorities have
adopted standards for the maintenance of capital by banks, and adherence to such
standards may further limit the ability of banks to pay dividends.
The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA"), among other things, identifies the following capital standards for
depository institutions: well capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized and critically
undercapitalized. A depository institution is well capitalized if it
significantly exceeds the minimum level required by regulation for each relevant
capital measure, adequately capitalized if it meets each such measure,
undercapitalized if it fails to meet any such measure, significantly
undercapitalized if it is significantly below any such measure, and critically
undercapitalized if it fails to meet any critical capital level set forth in the
regulations. FDICIA requires a bank that is determined to be undercapitalized
to submit a capital restoration plan, and the bank's holding company must
guarantee that the bank will meet its capital plan, subject to certain
limitations. FDICIA also prohibits banks from making any capital distribution
or paying any management fee if the bank would thereafter be undercapitalized.
FDICIA grants the FDIC authority to impose special assessments on insured
depository institutions to repay FDIC borrowings from the United States Treasury
or other sources and to establish semiannual assessment rates on Bank Insurance
Fund ("BIF") member banks so as to maintain the BIF at the designated reserve
ratio defined in FDICIA. FDICIA also required the FDIC to implement a risk-
based insurance assessment system pursuant to which the premiums paid by a
depository institution are based on the probability that the BIF will incur a
loss in respect of such institution. The FDIC has adopted a deposit insurance
assessment system that places each insured institution in one of nine risk
categories based on the level of its capital, evaluation of its risks by its
primary state or federal supervisor, statistical analysis and other information.
The FDIC has recently adopted an amendment to the BIF risk-based assessment
schedule which effectively eliminated deposit insurance assessments for most
commercial banks and other depository institutions with deposits insured by the
BIF. Under the FDIC amendment, the assessment rates for BIF-insured
institutions range from 0.27% of insured deposits for the most financially
troubled BIF members to 0% of deposits for most well-capitalized institutions,
including over 90% of BIF-insured institutions.
The Economic Growth and Regulatory Paperwork Reduction Act of 1996
("EGRPRA") was signed into law on September 30, 1996. EGRPRA streamlined the
non-banking activities application process for well-capitalized and well-managed
bank holding companies. Under EGRPRA, qualified bank holding companies may
commence a regulatory approved non-banking activity without prior notice to the
Federal Reserve Board. Written notice is required within 10 days after
commencing the activity. Under EGRPRA, the prior notice period is reduced to 12
days in the event of any non-banking acquisition or share purchase, assuming the
size of the acquisition does not exceed 10% of risk-weighted assets of the
acquiring bank holding company and the consideration does not exceed 15% of Tier
I capital. The foregoing prior notice requirement also applies to commencing
3
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non-banking activity de novo which has been previously approved by order of the
Federal Reserve Board, but not yet implemented by regulations. EGRPRA also
provides for the recapitalization of the Savings Association Insurance Fund in
order to bring that fund into parity with the BIF of the FDIC.
The references in this section to various aspects of supervision and
regulation are brief summaries which do not purport to be complete and which are
qualified in their entirety by reference to applicable laws, rules and
regulations. Any change in applicable laws or regulations may have a material
effect on the business and prospects of Mid-Missouri. The operations of Mid-
Missouri may be affected by legislative changes and by the policies of various
regulatory authorities. Mid-Missouri is unable to predict the nature or the
extent of the effects on its business and earnings that fiscal or monetary
policies, economic controls or new federal or state legislation may have in the
future.
(c) Competition
-----------
Mid-Missouri and the Bank encounter substantial competition in all aspects
of their banking activities. New banks may be established in the market area of
the Bank, and the location of existing banks may be moved on occasion. In
addition, competing banks and competing bank holding companies are continuing to
establish separate banking facilities or branches which have been permitted
under Missouri law since 1972. Any such new or relocated banks and facilities
may have a tendency to increase the competition faced by the Bank. On November
29, 1990, the law of Missouri was changed to permit unlimited, state-wide
branching for both national and state-chartered banks, subject to certain
criteria.
As a lender, the Bank competes not only with other banks but also with
savings and loan associations, credit unions, finance companies, insurance
companies and other non-banking financial institutions that offer credit. The
Bank also competes for savings and time deposits with other banks, savings and
loan associations, credit unions, money market and mutual funds, and issuers of
commercial paper, securities and various forms of fixed and variable income
investments. The principal competitive factors in the markets for deposits and
loans are interest rates paid and interest rates charged, along with related
services; accessibility to customers is also a substantial factor.
ITEM 2. DESCRIPTION OF PROPERTY
- ------ -----------------------
The Registrant, through its subsidiary Bank, owns its corporate offices
which are located at 318 West Main Street, Sullivan, Missouri 63080. The
Registrant also owns the following real properties which are presently used by
the Bank for its activities: 328 E. South Service Road, Sullivan, Missouri
(banking facility); 433 E. Springfield, Sullivan, Missouri (motor bank). In the
opinion of the Registrant's management, the physical properties of the
Registrant and the Bank are suitable and adequate and are being productively
utilized.
ITEM 3. LEGAL PROCEEDINGS
- ------ -----------------
The Registrant is not a party, and none of its properties is subject, to
any pending legal proceeding, other than routine litigation incidental to the
Registrant's business.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------ ---------------------------------------------------
No matter was submitted during the fourth quarter of the fiscal year ended
December 31, 1997 to a vote of security holders of the Registrant, through the
solicitation of proxies or otherwise.
4
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PART II
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ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
- ------ --------------------------------------------------------
The Registrant has only one class of common equity, the Mid-Missouri Common
Stock. There were 231,361 shares of the Mid-Missouri Common Stock outstanding
at December 31, 1997, held by approximately 190 shareholders. There exists no
established public trading market for shares of Mid-Missouri Common Stock. The
Board of Directors of the Registrant may, from time to time, declare cash
dividends to the holders of the Mid-Missouri Common Stock, who are entitled to
share equally in any such dividends. During 1997 and 1996, Mid-Missouri paid
dividends of $2.00 per each outstanding share of Mid-Missouri Common Stock.
Mid-Missouri has no restrictions on its ability to pay dividends beyond the
normal regulatory restrictions.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- ------ -----------------------------------------------------------------------
OF OPERATIONS
- -------------
The following discussion and analysis is intended to review the significant
factors affecting the financial condition and results of operations of Mid-
Missouri for the two (2) year period ended December 31, 1997. It provides a
more comprehensive review than is otherwise apparent from the financial
statements alone. Reference should be made to those statements and to the
selected financial data presented elsewhere in this Form 10-KSB for an
understanding of the following review.
FOR THE TWO (2) YEARS ENDED DECEMBER 31, 1997 AND 1996
------------------------------------------------------
FINANCIAL CONDITION
Mid-Missouri experienced substantial growth with total assets increasing
$41,335,000 or 34.2% from $120,742,000 on December 31, 1996 to $162,077,000 on
December 31, 1997. Mid-Missouri realized a significant increase in loans,
available-for-sale securities, time deposits and borrowings from the Federal
Home Loan Bank. A substantial portion of the loan and deposit increase can be
attributed to the acquisition and merger of American Federal on June 30, 1997.
The remaining increases can be attributed to a healthy local economy, as well as
special marketing and promotions designed to provide for sustained growth.
LOANS
The loan portfolio constitutes the major earning asset of most banks and
typically offers the best alternative for obtaining the maximum interest spread
above the cost of funds.
Loans increased $26,570,000 or 36.3% from $73,121,000 on December 31, 1996
to $99,691,000 on December 31, 1997. The increase was primarily related to real
estate loans, which increased $25,157,000 in 1997, and was supplemented by a
$1,426,000 increase in commercial loans. The growth in loans reflects the
addition of $7,700,000 in loans from the American Federal acquisition as well as
increased marketing efforts in the communities of Cuba, Union and others in
close proximity to Sullivan, Missouri. Additionally, the allowance for possible
loan losses increased $213,000 to $725,000 at December 31, 1997 from $512,000 at
December 31, 1996.
5
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The following table presents loans outstanding at December 31, 1997 and
1996, as well as a maturity schedule of loans for December 31, 1997.
<TABLE>
<CAPTION>
DECEMBER 31, 1997 DECEMBER 31, 1996
--------------------- ----------------------------
PERCENT PERCENT
AMOUNT OF TOTAL AMOUNT OF TOTAL
-------- ----------- ----------------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Commercial, financial
and agricultural $11,696 11.73% $10,270 14.05%
Real Estate-
Construction 4,649 4.66 2,526 3.45
Real Estate-mortgage 76,659 76.90 53,625 73.34
Consumer 6,687 6.71 6,700 9.16
------- ------- ----------------- --------
Total loans $99,691 100.00% $73,121 100.00%
======= ======= ================= ========
</TABLE>
<TABLE>
<CAPTION>
1997
AMOUNT DUE
------------------------------------------------------------------------
1 YEAR OR LESS GREATER THAN 1 YEAR THROUGH 5 AFTER 5 YEARS
----------------- ----------------------------- -------------------
FIXED VARIABLE FIXED VARIABLE FIXED VARIABLE
------- -------- ----------- --------------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Commercial, financial
and agricultural $ 8,679 $ 653 $ 2,312 $ - $ 52 $ -
Real Estate -
construction and
mortgage $ 9,982 $14,365 $13,405 $ 2,553 $41,003 $ -
Consumer $ 839 $ 985 $ 4,752 $ - $ 111 $ -
------- ------- ------- ----------------- -------- --------
$19,500 $16,003 $20,469 $ 2,553 $41,166 $ -
======= ======= ======= ================= ======== ========
</TABLE>
ALLOWANCE FOR LOAN LOSSES
The allowance for possible loan losses provides a reserve against which loan
losses are charged as those losses become evident. Management determines the
appropriate level of the allowance for loan losses on a quarterly basis. These
analyses take into consideration management's evaluation of the loan portfolio,
as well as prevailing and anticipated economic conditions and historical losses
by loan category.
Following are tables setting forth the activity for loan losses and the
allocation of the allowance for possible loan losses, along with certain ratios
for non-performing loans and total loans in 1997 and 1996.
6
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<TABLE>
<CAPTION>
ALLOWANCES FOR POSSIBLE LOAN LOSSES
1997 1996
------------------ -----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Balance at beginning of period $ 512 $ 600
Loans charged off:
Commercial & financial 22 16
Residential real estate 2 -
Consumer 94 121
------- -------
Total charge-offs 118 137
Recoveries:
Commercial & financial 14 7
Residential real estate 2 12
Consumer 85 30
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Total recoveries 101 49
Net loans charged off 17 88
Provision for possible loan losses
charged against income 230 -
------- -------
Balance at end of period $ 725 $ 512
======= =======
Allowance/total loans 0.73% 0.70%
Allowance/non-performing loans 95.90% 148.84%
Net charge-offs/average loans .03% .13%
Total loans $99,691 $73,121
Non-performing loans $ 756 $ 344
</TABLE>
7
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The following table sets forth the allocation of the allowance for loan losses
for the indicated categories of loans.
<TABLE>
<CAPTION>
1997 1996
------------------------------------------
PERCENT OF PERCENT OF
LOANS LOANS
RESERVE IN EACH RESERVE IN EACH
BALANCE CATEGORY BALANCE CATEGORY
------- ----------- ------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Commercial, financial
and agricultural $ 290 11.73% $205 14.05%
Real Estate-
Construction 37 4.66 26 3.45
Real Estate-mortgage 319 76.90 225 73.34
Installment loans to
individuals 79 6.71 56 9.16
Unallocated - - - -
----- ------ ---- ------
Total loans $ 725 100.00% $512 100.00%
===== ====== ==== ======
</TABLE>
RISK ELEMENTS IN A LOAN PORTFOLIO; INTEREST RECOGNITION
Risk elements in a loan portfolio include loans accounted for on a non-accrual
basis, accruing loans that are contractually past due ninety days or more as to
interest or principal payments, troubled debt restructurings, loans where there
are serious doubts as to the ability of the borrower to comply with the present
loan repayment terms, other real estate and significant industry concentrations
(such as real estate, energy or agricultural loans).
Non-performing assets are defined as loans delinquent 90 or more days, non-
accrual loans, restructured loans and foreclosed assets. Such assets do not
necessarily represent future losses to Mid-Missouri since underlying collateral
can be sold and the financial condition of the borrowers may improve.
Mid-Missouri's policy is to discontinue accruing interest on loans when
principal or interest is due and remains unpaid for 90 days or more, unless the
loan is well secured and in the process of collection. The Bank would have
recognized additional interest income of approximately $24,000 and $14,000,
respectively, if contractual interest on non-accrual loans had been recognized.
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1997 1996
---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Non-accrual loans $ 289 $ 159
Loans past due 90 days or more $ 467 $ 185
----- -----
Total non-performing loans $ 756 $ 344
Foreclosed loans $ - $ -
----- -----
Total non-performing assets $ 756 $ 344
===== =====
</TABLE>
8
<PAGE>
INVESTMENTS
The Bank's holdings of short-term investments and scheduled maturities of
investment securities serve as a source of liquidity to meet depositor and
borrower fund requirements.
Investments in available-for-sale securities increased $15,916,000, or 67.7%,
from $23,498,000 on December 31, 1996 to $39,414,000 on December 31, 1997. Mid-
Missouri's available-for-sale investments in U.S. Treasury and Agency securities
increased $10,556,000 in 1997, while also adding $1,984,000 in state and
political obligations and $2,768,000 in mortgage-backed securities. Investments
in held-to-maturity investments decreased $3,827,000, principally in investments
in U.S. Treasury securities. The decrease in held-to-maturity investments
resulted from maturities which were either reinvested in loans or investments
classified as available-for-sale. Approximately $8,900,000 in securities were
acquired as a result of Mid-Missouri's acquisition of American Federal.
The following table presents the composition of investment securities
allocated between held-to-maturity and available-for-sale. Weighted average
yields by investment type are also presented for December 31, 1997. The
weighted average yields on investments in state and political subdivisions have
not been calculated on a tax equivalent yield basis.
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1997 1996
-------------------------------------
CARRYING CARRYING
AMOUNT YIELD AMOUNT YIELD
------------ ------ ------- ------
(DOLLARS IN THOUSANDS)
HELD TO MATURITY:
<S> <C> <C> <C> <C>
U.S. Treasury $ 498 6.13% $ 2,960 5.07%
U.S. Government agencies and corporations 2,911 5.47% 3,595 5.93%
State and political subdivisions 5,160 5.28% 5,474 5.42%
Mortgage-backed securities 3,806 5.66% 4,173 5.47%
------- -------
Total investments held to maturity $12,375 5.48% $16,202 5.48%
======= =======
AVAILABLE-FOR-SALE:
U.S. Treasury $ 1,546 5.90% $ 2,239 5.90%
U.S. Government agencies and corporations 22,100 6.64% 10,851 6.68%
State and political subdivisions 7,944 5.04% 5,960 5.01%
Mortgage-backed securities 7,133 6.46% 4,366 6.20%
Other investments 691 5.25% 82 0.00%
------- -------
Total investments available-for-sale $39,414 6.26% $23,498 6.06%
======= =======
</TABLE>
9
<PAGE>
The following table shows the maturities and yields of investment securities
as of December 31, 1997.
<TABLE>
<CAPTION>
APPROXIMATE
AMORTIZED FAIR
COST VALUE YIELD
--------- ------- ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
In one year or less $ 6,118 $ 6,319 5.60%
After one year through five years 17,589 17,837 6.58%
After five through ten years 13,698 13,926 6.03%
After ten years 2,956 3,077 5.71%
Not due on a single date 10,931 11,079 NA
------- ------- ----
Total $51,292 $52,238 6.12%
======= ======= ====
</TABLE>
DEPOSITS
The deposit base provides the major source for interest earning assets.
Deposits increased $22,954,000 or 24.0%, from $95,755,000 on December 31, 1996
to $118,709,000 on December 31, 1997. The increase resulted from a $19,682,000
increase in time deposits, which was accompanied by a $3,273,000 increase in
demand savings, NOW and money market deposits. Approximately $13,001,000 in
deposits were acquired in conjunction with the American Federal acquisition.
The deposit increase was also the result of increased marketing efforts in
Sullivan and surrounding communities.
Maturity of time deposits $100,000 and greater at December 31, 1997 is
illustrated below:
<TABLE>
<CAPTION>
MATURITY OF TIME DEPOSIT
(GREATER THAN) $100,000
------------------------------------
PERCENT
1997 OF TOTAL
---------------- ------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Three months or less $ 5,047 25.91%
Over three through six months 9,031 46.36
Over six months through twelve 5,401 27.73
------- ------
Total $19,479 100.00%
======= ======
</TABLE>
10
<PAGE>
RESULTS OF OPERATIONS
1997 COMPARED TO 1996.
Net income for 1997 amounted to $1,205,000 or $5.59 per share. This
represents an increase of $92,000 or $.02 per share over 1996 net income of
$1,113,000 or $5.57 per share. The increase resulted from increases in net
interest income which were partially offset by increases in operating expenses.
The net interest income increased $727,000 or 17.1% in 1997. This resulted
from a significant increase in income from loans which was offset by a higher
cost of deposits. The net interest margin declined from 4.08% to 3.69% due to a
.39% increase in the average rate paid on interest-bearing liabilities.
Interest income increased $2,452,000 or 30.0% from $8,163,000 in 1996 to
$10,615,000 in 1997. Interest expense increased $1,725,000 or 44.1% in 1997
from a balance of $3,915,000 in 1996 to $5,640,000 in 1997. Interest expense on
deposits increased $1,191,000, while the remaining increase in interest expense
of $534,000 was related to repurchase agreements and other borrowings.
OTHER INCOME/EXPENSE
Other income increased $73,000 from $874,000 as of December 31, 1996, to
$947,000 as of December 31, 1997. The increase in other income consists
primarily of service charges on deposits and income from non-banking activities
such as trust, brokerage and fixed rate mortgage fees. Other expenses increased
$517,000 from $3,549,000 on December 31, 1996, to $4,066,000 on December 31,
1997. Other expenses consist primarily of salaries, employee benefits, and data
processing expenses. Virtually all categories of non-interest income and
expense experienced increases due to growth and inflation.
The following tables demonstrate the changes in the components of interest
income and interest expense.
11
<PAGE>
<TABLE>
<CAPTION>
1997 1996
--------- ---------
PERCENT INTEREST AVERAGE PERCENT INTEREST AVERAGE
AVERAGE OF TOTAL INCOME/ YIELD/ AVERAGE OF TOTAL INCOME/ YIELD/
BALANCE ASSETS EXPENSE RATE BALANCE ASSETS EXPENSE RATE
--------- --------- ------- -------- --------- --------- ---------- -------
(DOLLARS IN THOUSANDS) (DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest-earning assets
Loans $ 86,720 60.95% $ 7,723 8.90% $ 67,968 61.48% $6,030 8.87%
Taxable securities 36,173 25.42 2,279 6.30% 28,745 26.01% 1,730 6.02%
Nontaxable securities 11,938 8.39 613 5.13% 7,106 6.43% 379 5.33%
Federal funds sold 67 0.05 - 5.97% 420 0.38% 24 5.71%
-------- ------ ------- -------- ------ ------
Total interest earning assets $134,898 94.81 $10,615 7.87% $104,239 94.30% $8,163 7.83%
======= ======== ======
Non-interest bearing assets
Cash & due from banks $ 3,417 2.40 $ 3,159 2.86
Premises & equipment 2,245 1.58 1,983 1.79
Other assets 2,428 1.70 1,831 1.66
Reserve for loan losses (700) (0.49) (678) (0.61)
-------- ------ -------- ------
Total Assets $142,288 100.00% $110,534 100.00%
======== ====== ======== ======
Interest-bearing liabilities
NOW accounts $ 21,636 15.20% $ 483 2.23% $ 21,352 19.31% $ 484 2.27%
Savings accounts 12,444 8.75 314 2.52% 11,849 10.72 302 2.55%
Money market accounts 2,560 1.80 89 3.48% 1,843 1.67 63 3.42%
Time deposits 64,433 45.28 3,703 5.75% 45,449 41.12 2,548 5.61%
Short-term borrowings 19,137 13.45 1,051 5.49% 10,468 9.47 518 4.95%
-------- ------ ------- -------- ------ ------
Total interest-bearing liabilities 120,210 84.48 $ 5,640 4.69% 90,961 82.29 $3,915 4.30%
======= ======
Non-interest bearing liabilities
Demand deposits 10,316 7.25 9,893 8.95
Other liabilities 637 0.45 522 0.47
-------- ------ -------- ------
Total liabilities 131,163 92.18 101,376 91.71
-------- --------
Stockholders' equity 11,125 7.82 9,158 8.29
-------- ------ -------- ------
Total liabilities and
Stockholders' equity $142,288 100.00% $110,534 100.00%
======== ====== ======== ======
Net interest income $ 4,975 $4,248
Interest rate spread 3.18% 3.53%
Net interest margin 3.69% 4.08%
</TABLE>
12
<PAGE>
Net interest income is affected by the volume and rate of both interest-
earning assets and interest-bearing liabilities. The following table
illustrates the dollar effect and rate changes for the different categories of
interest-earning assets and interest bearing liabilities and the resultant
change in interest income and interest expense. Non-performing loans are
included in the following table.
<TABLE>
<CAPTION>
1997 COMPARED TO 1996 COMPARED TO
1996 INCREASE 1995 INCREASE
(DECREASE) DUE TO (DECREASE) DUE TO
------------------------- --------------------------
VOLUME RATE RATE/VOL VOLUME RATE RATE/VOL
------- ----- --------- ------- ----- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
INTEREST EARNED ON:
Loans $1,664 $ 19 $ 5 $ 769 $ (68) $(10)
Taxable Securities 447 81 21 (292) (39) 6
Nontaxable Securities 258 (14) (10) 149 (20) (11)
Federal funds sold (20) 1 (1) (55) (3) 2
------ ---- ---- ----- ----- ----
Total interest income 2,349 87 15 571 (130) (13)
INTEREST PAID ON:
NOW accounts $ 6 $ (8) $ 0 $ (39) $ (36) $ 2
Savings accounts 15 (3) 0 (49) (57) 7
Money market accounts 25 1 0 (6) 7 (1)
Time deposits 1,064 64 27 216 55 5
Short-term borrowings 429 57 47 214 (6) (4)
------ ---- ---- ----- ----- ----
Total interest expense 1,539 111 74 336 (37) 9
Net interest income $ 810 $(24) $(59) $ 235 $ (93) $(22)
====== ==== ==== ===== ===== ====
</TABLE>
Net income as a percent of average assets and average equity, including
changes in the fair value of available-for-sale securities, for the last two
years was:
<TABLE>
<CAPTION>
RETURN ON AVERAGE ASSETS RETURN ON AVERAGE EQUITY
------------------------- --------------------------
DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Income 1.16% 1.00% 14.85% 12.01%
</TABLE>
Dividends declared by Mid-Missouri for the past two years were:
<TABLE>
1997 1996
---- ------
<S> <C> <C>
Dividend Payout Ratio 38.39% 35.93%
Equity to Asset Ratio 8.05% 7.91%
</TABLE>
CAPITAL
During 1997, the Bank increased capital by $2,277,107 due to the acquisition
of American Federal. Capital as a percent of total assets was 8.05% at December
31, 1997 compared to 7.91% at December 31, 1996. Book value per share was
$56.36 at December 31, 1997 compared to $47.86 at December 31, 1996.
13
<PAGE>
LIQUIDITY
The central objectives of liquidity management are to ensure that the Bank has
ready access to sufficient funds to meet maturing obligations and existing
commitments to enable the Bank to withstand fluctuations in deposit levels and
to provide for customers' credit needs. Liquidity management is viewed from both
asset and liability perspectives. The basic concept is the amount of assets
maturing within certain time frames should relate to the amount of liabilities
maturing within the same period. This procedure enables the Bank to monitor its
liquidity requirements, thereby facilitating the meeting of obligations as they
mature and, at the same time, allowing the Bank to respond to shifts in interest
rates. Management believes that during the current period of economic
uncertainty and interest rate volatility, this flexibility is imperative in
maintaining liquidity and acceptable profit margins. Management has
historically maintained an adequate liquidity position and will endeavor to do
so in the future.
The following table provides information on short-term borrowing which the
Bank uses to fund short-term liquidity needs.
<TABLE>
<CAPTION>
MAXIMUM
END OF YEAR OUTSTANDING
OUTSTANDING WEIGHTED AT ANY AVERAGE WEIGHTED
AT END OF YEAR AVERAGE RATE MONTH END OUTSTANDING AVERAGE RATE
-------------- ------------- ----------- ----------- -------------
(DOLLARS IN THOUSANDS)
1997
CATEGORY:
<S> <C> <C> <C> <C> <C>
Federal Home Loan Bank $17,079,014 6.01% $17,079,014 $6,438,378 6.07%
Federal Funds Purchased $ 2,200,000 6.11% $ 4,700,000 $1,984,658 6.11%
Securities Sold under Repurchase
Plan $ 3,053,726 5.35% $ 3,221,558 $3,024,854 5.35%
Sweep Accounts $ 7,379,724 4.91% $ 8,984,706 $7,688,833 4.91%
1996
CATEGORY:
Federal Home Loan Bank $ 1,000,000 6.01% $ 5,000,000 $ 969,399 6.01%
Federal Funds Purchased $ 3,150,000 5.72% $ 3,150,000 $ 642,345 5.72%
Securities Sold under Repurchase
Plan $ 3,206,548 5.10% $ 3,206,548 $3,133,781 5.10%
Sweep Accounts $ 7,553,838 4.60% $ 7,553,838 $5,722,480 4.60%
</TABLE>
EFFECTS IN INFLATION
Inflation continues to affect Mid-Missouri as it does other businesses.
Overhead costs for personnel, occupancy, and equipment tend to track inflation
closely. The ability of Mid-Missouri to offset the effects of inflation on its
operations must come from prudent management of its asset/liability mix, expense
control, and realistic pricing of services.
ITEM 7. FINANCIAL STATEMENTS
- ------ --------------------
The Registrant's financial statements are included under Part IV herein.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
- ------ ---------------------------------------------------------------
FINANCIAL DISCLOSURE
- --------------------
None.
14
<PAGE>
PART III
--------
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
- ------ -------------------------------------------------------------
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
- -------------------------------------------------
The following table indicates the principal occupation or employment for the
past five years, age, other directorships, and the year first elected as a
Director of the Registrant with respect to the directors of Mid-Missouri at
December 31, 1997. Information with respect to the business experience of each
Director of the Registrant has been furnished by such Director or has been
obtained from the records of the Registrant.
<TABLE>
<CAPTION>
DIRECTOR OF THE
REGISTRANT
NAME, AGE, PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS SINCE
- ------------------------------------------------------- ---------------
<S> <C>
E. Milt Branum, Jr. (56) 1993
President and CEO, Mid-Missouri Holding Company, Inc.
President and CEO, Bank of Sullivan
Director, Bank of Sullivan
Director, Farmers & Merchants Bank of St. Clair
Director, St. Clair Bancshares, Inc.
John M. Brummet (76) 1997
Business Investor
(retail grocery and commercial property leasing)
Director, Bank of Sullivan
Vice President, Mid-Missouri Holding Company, Inc.
Edward P. Burke (79) 1993
Attorney, Edward P. Burke, Attorney at Law
Vice President, Mid-Missouri Holding Company, Inc.
Director, Bank of Sullivan
Gordian J. Mathias (82) 1993
Investor
Vice President, Mid-Missouri Holding Company, Inc.
Director, Bank of Sullivan
James E. McIntosh (84) 1993
Business Investor
(grocery stores and real estate)
Treasurer, Mid-Missouri Holding Company, Inc.
Director, Bank of Sullivan
Norman M. Rubenstein (78) 1993
Paramount Headwear
(manufacturing)
Investor
Vice President, Mid-Missouri Holding Company, Inc.
Director, Bank of Sullivan
Chairman, Paramount Cap Manufacturing Co.
Albert M. Schlueter (59) 1993
Attorney, Schlueter, Elbling & Byrne
Vice President, Mid-Missouri Holding Company, Inc.
Director, Bank of Sullivan
John W. Waller (77) 1993
Attorney, John J. Waller, Attorney at Law
Chairman of the Board, Mid-Missouri Holding Company, Inc.
Chairman of the Board, Bank of Sullivan
Chairman of the Board, Farmers & Merchants Bank of St. Clair
Chairman of the Board, St. Clair Bancshares, Inc.
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
T. Scott Waller (40) 1997
Operations Officer, Farmers & Merchants Bank of St. Clair
Vice President, Mid-Missouri Holding Company, Inc.
Director, Bank of Sullivan
Director, Farmers & Merchants Bank of St. Clair
Director, St. Clair Bancshares, Inc.
Edward C. Wallis (62) 1993
Owner-Operator, Bourbon Roller Mill
(feed and supply store)
Vice President, Mid-Missouri Holding Company, Inc.
Director, Bank of Sullivan
</TABLE>
No person named in this section has been involved in any material legal
proceedings enumerated in Item 401(d) of Regulation S-B promulgated under the
Securities Exchange Act of 1934, as amended, which are material to the
evaluation of the ability or integrity of any such person.
ITEM 10. EXECUTIVE COMPENSATION
- ------- ----------------------
The following table sets forth information concerning the remuneration paid or
accrued during in 1997 and 1996 for E. Milt Branum, Jr., the President and Chief
Executive Officer of the Registrant. None of the other executive officers of
the Registrant received total annual salary and bonuses exceeding One Hundred
Thousand Dollars ($100,000) during the fiscal year ended December 31, 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
ANNUAL LONG TERM ALL
COMPENSATION COMPENSATION OTHER
COMPENSATION
--------------- ------------------
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS AWARDS
------------------
($) ($) Securities ($)
Underlying Options
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
E. MILT BRANUM, JR. (56) 1997 $107,788 $16,168 N/A $-0-
President, Chief Executive Officer and
Director of the Registrant and the Bank 1996 98,000 15,194 N/A $-0-
- ----------------------------------------------------------------------------------------------------------
</TABLE>
Mid-Missouri does not maintain stock option, stock appreciation right,
long-term incentive, deferred compensation or similar plans and no stock
options, stock appreciation rights, long-term incentive awards or similar
benefits are issued or granted by Mid-Missouri to its directors, executive
officers or employees.
Neither Mid-Missouri nor the Bank has an employment agreement with any of
their respective executive officers or other employees.
Mid-Missouri and the Bank have had and expect to have in the future, loans
and other banking transactions in the ordinary course of business with a number
of its officers and directors and their associates. Such transactions were made
and will continue to be made in the ordinary course of business on substantially
the same terms, including interest rates and collateral, as those prevailing at
the time for comparable transactions with other persons and did not and will not
involve more than normal risk of collectibility or present other unfavorable
features. During the previous calendar year, the Bank has had commercial
transactions in the ordinary course of business with companies with which
certain of Mid-Missouri's directors are affiliated. No significant business or
personal relationships with the subsidiaries of Mid-Missouri existed by virtue
of a person's position in Mid-Missouri or in the Bank, or ownership interest in
Mid-Missouri.
Neither Mid-Missouri nor the Bank has a Compensation Committee responsible
for establishing compensation. Salaries and bonuses for executive officers
(other than E. Milt Branum, Jr.) and employees of Mid-Missouri and the Bank are
determined by the action of the respective boards of directors of such entities
at large upon recommendation of Mr. E. Milt Branum, Jr., the President and Chief
Executive Officer of each such entity. Mr. Branum's recommendations in turn are
based on (i) the report of an independent personnel review firm engaged by Mid-
Missouri and the Bank annually to evaluate salary and bonus levels of all
executive officers and employees, (ii) experience levels of incumbents and
present facts and circumstances with respect to each, and (iii) competitive
compensation data. This information is available to and discussed with the
other members of the boards of directors of Mid-Missouri and the Bank as such
boards determine salaries and bonuses.
16
<PAGE>
The salary and bonus paid annually to E. Milt Branum, President and Chief
Executive Officer of Mid-Missouri and the Bank, is determined by the other
members of the respective boards of directors of these entities. Mr. Branum
does not participate in such deliberations. Mr. Branum's compensation for
fiscal year 1997 was increased due to the positive performance of Mid-Missouri
and the Bank during such period.
Mid-Missouri has a non-contributory defined pension plan covering all
employees who meet the eligibility requirements. To be eligible, an employee
must be 21 years of age and have completed one year of continuous service. The
plan provides benefits based on the career earnings of each participant. Mid-
Missouri's funding policy is to make the minimum annual contribution that is
required by applicable regulations, plus such amounts as Mid-Missouri may
determine to be appropriate from time to time.
Directors of Mid-Missouri receive no fees for their service on the board of
directors of Mid-Missouri. Directors of the Bank receive $350.00 per regular
meeting, with a limit of 12 such meetings annually. Board committee members
receive $100.00 per committee meeting, other than John W. Waller and E. Milt
Branum, Jr. who receive no compensation for committee meeting service. There
are no other arrangements pursuant to which any director of Mid-Missouri or the
Bank was compensated during fiscal year 1997 for service as such.
During 1997, there were seven (7) regular meetings and no special meetings
of the Registrant's Board of Directors. Each of the Directors of the Registrant
attended at least fifty-seven percent (57%) of the aggregate of the total number
of Board of Directors meetings of the Registrant and the total number of
meetings held by all committees of the Board on which such Director served
during 1997.
The Registrant has a standing Audit Committee (established in 1990). This
Committee consists of three non-employee Directors. It is the responsibility of
the Audit Committee to monitor the internal accounting controls and practices of
the Registrant and report its findings to the full Board of Directors. The
Committee meets quarterly and met four (4) times during the last fiscal year.
The Registrant has no standing nominating committee and no committee performs a
similar function. Director nominations on behalf of the Registrant are
recommended by the Board of Directors. Nomination recommendations to the Board
of Directors by shareholders are not accepted. As discussed above, the
Registrant has no standing Compensation Committee. Determination of salaries
and other compensation paid to officers and directors of the Registrant is
discussed above in greater detail.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- ------- --------------------------------------------------------------
The following tables set forth, as of December 31, 1997, the number of
shares of Mid-Missouri Common Stock, the only class of equity securities
outstanding, owned beneficially by each of the Directors of Mid-Missouri and the
Executive Officer named in the Summary Compensation Table above, as well as by
all Directors and such named Executive Officer of the Registrant as a group,
without naming them, and the number of shares held by any person who is known to
the Registrant to be the beneficial owner of more than five percent (5%) of the
outstanding Mid-Missouri Common Stock, the only class of voting securities
outstanding.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP/1/
--------------------------
SOLE VOTING OTHER PERCENT
AND INVESTMENT BENEFICIAL OF
OFFICERS & DIRECTORS POWER OWNERSHIP CLASS
- -------------------------------- ---------- --------- -------
<S> <C> <C> <C>
E. Milt Branum, Jr. 255 -0- 0.11%
8260 Seminary Road
Sullivan, MO 63080
John M. Brummet 1,504 -0- 0.65%
P.O. Box B
Cuba, MO 65453
Edward P. Burke 24,409 -0- 10.55%
31 N. Old Orchard, Apt. 339
Webster Groves, MO 63119
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Gordian J. Mathias 16,889 -0- 7.30%
P.O. Box 572
Sullivan, MO 63080
James E. McIntosh 6,200 11,337 7.58%
P.O. Box 246
Sullivan, MO 63080
Norman M. Rubenstein 10,481 -0- 4.53%
13306 Fairfield Circle Dr.
Chesterfield, MO 63017
Albert M. Schleuter 17,398 -0- 7.52%
11 S. Meramec, Suite 1400
St. Louis, MO 63105
John W. Waller 32,229 -0- 13.93%
101 Country Club Drive
Sullivan, MO 63080
T. Scott Waller 19,180 -0- 8.29%
604 Jane St.
Sullivan, MO 63080
Edward C. Wallis 255 -0- 0.11%
P.O. Box 177
Bourbon, MO 65441
</TABLE>
Executive Officers and Directors
as a Group (10 persons) 128,800 11,337 60.57%
/1/ The information set forth in these tables is based upon information
furnished to the Registrant by the named persons or entities. Beneficial
ownership of shares, as determined in accordance with applicable S.E.C. rules,
includes shares as to which a person directly or indirectly has or shares voting
power or investment power or both.
/2/ The percentages of the class is based on the total number of shares of Mid-
Missouri Common Stock outstanding as of December 31, 1997 (231,361 shares).
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- ------- ----------------------------------------------
None.
18
<PAGE>
PART IV
-------
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
- ------- --------------------------------
(a) Documents filed as a part of this Report:
Report
Page Number*
-----------
1. Consolidated Financial Statements:
Independent Accountants' Report............................
Balance Sheets
December 31, 1997 and 1996............................
Statements of Income -
Years Ended December 31, 1997 and 1996................
Statements of Changes in Shareholders' Equity -
Years Ended December 31, 1997 and 1996................
Statements of Cash Flows -
Years Ended December 31, 1997 and 1996................
Notes to Financial Statements..............................
2. Financial Statement Schedules:
All other schedules are omitted because they are not applicable, not
required, or the information is included elsewhere in the Financial
Statements.
3. Exhibits:/*/
3(i) Articles of Incorporation of the Registrant,
as amended..........................................
3(ii) Bylaws of the Registrant............................
21 List of the Subsidiaries of the Registrant..........
27 Financial Data Schedule.............................
(b) Reports filed on Form 8-K:
No reports on Form 8-K were filed for the three months ended December
31, 1997.
*Page numbers appear only on the manually signed original form 10-KSB.
19
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
MID-MISSOURI HOLDING COMPANY, INC.
By /s/ E. Milt Branum
------------------
E. Milt Branum
President and Chief Executive Officer
(Principal Executive Officer)
April 15, 1998
By /s/ James E. McIntosh
---------------------
James E. McIntosh
Treasurer
(Principal Financial Officer, Controller or
Principal Accounting Officer)
April 15, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ John W. Waller /s/ E. Milt Branum, Jr.
---------------------- -----------------------
John W. Waller E. Milt Branum, Jr.
Chairman of the Board President, Chief Executive Officer and
Director
Date: April 15, 1998 Date: April 15, 1998
/s/ Edward P. Burke /s/ James E. McIntosh
------------------- ---------------------
Edward P. Burke James E. McIntosh
Director Director
Date: April 15, 1998 Date: April 15, 1998
20
<PAGE>
/s/ Norman M. Rubenstein /s/ Albert M. Schlueter
------------------------ -----------------------
Norman M. Rubenstein Albert M. Schlueter
Director Director
Date: April 15, 1998 Date: April 15, 1998
/s/ T. Scott Waller /s/ Edward C. Wallis
------------------- --------------------
T. Scott Waller Edward C. Wallis
Director Director
Date: April 15, 1998 Date: April 15, 1998
/s/ John M. Brummet
--------------------
John M. Brummet
Director
Date: April 15, 1998
21
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
REGULATION S-B REPORT
EXHIBIT PAGE
NO. DESCRIPTION NO.*
- ---------------- -------------------------------------------------------- ------
<S> <C> <C>
3(i) Articles of Incorporation of the Registrant, as amended.
3(ii) Bylaws of the Registrant.
21 List of Subsidiaries of the Registrant
27 Financial Data Schedule
=======================================================================================
</TABLE>
*Page numbers appear only on the manually signed original form 10-KSB.
<PAGE>
FINANCIAL STATEMENTS
INDEPENDENT ACCOUNTANTS' REPORT
<PAGE>
MID-MISSOURI HOLDING COMPANY, INC.
ACCOUNTANTS' REPORT AND
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
<PAGE>
MID-MISSOURI HOLDING COMPANY, INC.
DECEMBER 31, 1997 AND 1996
TABLE OF CONTENTS
-----------------
Page
----
INDEPENDENT ACCOUNTANTS' REPORT............................. 1
CONSOLIDATED FINANCIAL STATEMENTS
Balance Sheets............................................. 2
Statements of Income....................................... 3
Statements of Changes in Stockholders' Equity.............. 5
Statements of Cash Flows................................... 6
Notes to Financial Statements.............................. 8
<PAGE>
Independent Accountants' Report
-------------------------------
Board of Directors
Mid-Missouri Holding Company, Inc.
Sullivan, Missouri
We have audited the accompanying consolidated balance sheets of MID-MISSOURI
HOLDING COMPANY, INC., as of December 31, 1997 and 1996, and the related
consolidated statements of income, changes in stockholders' equity and cash
flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of MID-MISSOURI
HOLDING COMPANY, INC. as of December 31, 1997 and 1996, and the results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles.
BAIRD, KURTZ & DOBSON
St. Louis, Missouri
February 11, 1998
<PAGE>
<TABLE>
<CAPTION>
MID-MISSOURI HOLDING COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1997 and 1996
ASSETS
------ 1997 1996
------------- -------------
<S> <C> <C>
Cash and due from banks ........................................................ $ 4,308,509 $ 3,764,390
Available-for-sale securities .................................................. 39,414,066 23,497,514
Held-to-maturity securities .................................................... 12,375,148 16,202,182
Other investments .............................................................. 1,579,780 595,680
Loans .......................................................................... 98,965,645 72,609,368
Bank premises and equipment .................................................... 2,383,280 2,019,415
Deferred income taxes .......................................................... 87,000 176,656
Accrued interest receivable .................................................... 1,344,904 1,010,406
Excess of cost over fair value of net assets
acquired, at amortized cost ................................................. 1,378,471 671,914
Prepaid expenses and other assets .............................................. 240,653 194,584
------------- -------------
Total Assets .......................................................... $ 162,077,456 $ 120,742,109
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Demand deposits ................................................................ $ 11,211,408 $ 9,515,251
Savings, NOW and money market deposits ......................................... 35,872,275 34,295,398
Time deposits, $100,000 and over ............................................... 19,479,400 11,107,323
Other time deposits ............................................................ 52,146,194 40,836,656
------------- -------------
Total Deposits ........................................................ 118,709,277 95,754,628
Federal funds purchased ........................................................ 2,200,000 3,150,000
Other borrowings from the Federal Home Loan Bank ............................... 17,079,014 1,000,000
Securities sold under agreements to repurchase ................................. 10,433,450 10,760,386
Accrued interest, taxes and other expenses ..................................... 615,981 504,223
------------- -------------
Total Liabilities ..................................................... 149,037,722 111,169,237
------------- -------------
STOCKHOLDERS' EQUITY
Common stock, $10 par value; authorized,
issued and outstanding, 231,361 shares - 1997
and 200,000 shares - 1996 ................................................. 2,313,610 2,000,000
Additional paid-in-capital .................................................. 8,498,735 6,535,238
Retained earnings ........................................................... 1,923,315 1,180,723
Unrealized appreciation (depreciation) on investment securities, net
of income taxes of ($192,759) and $89,576 ................................. 304,074 (143,089)
------------- -------------
Total Stockholders' Equity ............................................ 13,039,734 9,572,872
------------- -------------
Total Liabilities and Stockholders' Equity ............................ $ 162,077,456 $ 120,742,109
============= =============
</TABLE>
See Notes to Consolidated Financial Statements
-2-
<PAGE>
<TABLE>
<CAPTION>
MID-MISSOURI HOLDING COMPANY, INC.
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1997 and 1996
1997 1996
------------ ------------
<S> <C> <C>
INTEREST INCOME
Loans ..................................... $ 7,722,516 $ 6,030,197
Investment securities - taxable ........... 2,279,292 1,729,896
Investment securities - non-taxable ....... 613,250 378,753
Federal funds sold ........................ -- 24,006
------------ ------------
Total Interest Income ............... 10,615,058 8,162,852
------------ ------------
INTEREST EXPENSE
Deposits .................................. 4,588,620 3,397,326
Federal funds purchased and securities sold
under agreements to repurchase .......... 660,323 459,483
Other borrowings .......................... 391,053 58,281
------------ ------------
5,639,996 3,915,090
------------ ------------
NET INTEREST INCOME .......................... 4,975,062 4,247,762
PROVISION FOR LOAN LOSSES .................... 230,000 --
------------ ------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES ................. 4,745,062 4,247,762
------------ ------------
NON-INTEREST INCOME
Service charges on deposit accounts ....... 624,834 612,263
Net realized gains (losses) on sales of
available-for-sale securities ........... (16,655) 8,297
Other income .............................. 338,428 253,413
------------ ------------
Total Non-Interest Income ........... 946,607 873,973
------------ ------------
NON-INTEREST EXPENSES
Salaries .................................. 1,630,579 1,404,243
Employee benefits ......................... 331,619 260,064
Data processing expense ................... 299,168 272,513
Occupancy expense ......................... 155,482 130,057
Other expenses ............................ 1,649,097 1,482,559
------------ ------------
Total Non-Interest Expenses ......... 4,065,945 3,549,436
------------ ------------
</TABLE>
See Notes to Consolidated Financial Statements
-3-
<PAGE>
<TABLE>
<CAPTION>
MID-MISSOURI HOLDING COMPANY, INC.
CONSOLIDATED STATEMENTS OF INCOME, Continued
YEARS ENDED DECEMBER 31, 1997 and 1996
1997 1996
---------- ----------
<S> <C> <C>
INCOME BEFORE INCOME TAXES ....... $1,625,724 $1,572,299
PROVISION FOR INCOME TAXES ....... 420,410 459,139
---------- ----------
NET INCOME ....................... $1,205,314 $1,113,160
========== ==========
BASIC EARNINGS PER SHARE ......... $ 5.59 $ 5.57
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements
-4-
<PAGE>
<TABLE>
<CAPTION>
MID-MISSOURI HOLDING COMPANY, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1997 and 1996
Unrealized
Appreciation
(Depreciation)
Additional on Available-
Common Paid-In Retained for-Sale
Stock Capital Earnings Securities, Net Total
--------------- ------------ ------------ --------------- ------------
<S> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1996 $ 2,000,000 $ 6,535,238 $ 467,589 $ (129,783) $ 8,873,044
Net income ......................... -- -- 1,113,160 -- 1,113,160
Cash dividends paid
$2.00 per share .................. -- -- (400,026) -- (400,026)
Change in unrealized
depreciation on available-for-sale
securities, net of income
taxes of $8,330 .................. -- -- -- (13,306) (13,306)
--------------- ------------ ------------ ------------ ------------
BALANCE, DECEMBER 31, 1996 2,000,000 6,535,238 1,180,723 (143,089) 9,572,872
Common stock issued to
shareholders of American
Federal Savings and
Loan Association ................. 313,610 1,963,497 -- -- 2,277,107
Net income ......................... -- -- 1,205,314 -- 1,205,314
Cash dividends paid
$2.00 per share .................. -- -- (462,722) -- (462,722)
Change in unrealized
appreciation on available-for-sale
securities, net of income
taxes of $254,934 ................ -- -- -- 447,163 447,163
--------------- ------------ ------------ ------------ ------------
BALANCE, DECEMBER 31, 1997 $ 2,313,610 $ 8,498,735 $ 1,923,315 $ 304,074 $ 13,039,734
=============== ============ ============ ============ ============
</TABLE>
See Notes to Consolidated Financial Statements
-5-
<PAGE>
<TABLE>
<CAPTION>
MID-MISSOURI HOLDING COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1997 and 1996
1997 1996
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income ......................................... $ 1,205,314 $ 1,113,160
Items not requiring (providing) cash:
Depreciation ..................................... 253,691 227,527
Amortization of organization costs ............... 7,500 7,500
Amortization of excess of cost over fair value of
net assets acquired .......................... 78,882 52,699
Realized loss on impairment of held-to-maturity
securities ................................... 12,000 56,000
Net amortization of premiums on
investments securities ....................... 75,757 56,976
Net realized (gains) losses on sales of available-
for-sale securities .......................... 16,655 (9,144)
Deferred income taxes ............................ (125,321) 9,000
Changes in:
Accrued interest receivable ...................... (194,198) (130,214)
Prepaid expenses and other assets ................ 263,425 (36,936)
Accrued interest, taxes and other expenses ....... 4,909 (149,777)
------------ ------------
Net cash provided by operating activities .... 1,828,614 1,196,791
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Net increase in loans .............................. (19,071,472) (11,301,091)
Net increase in other investments .................. (613,888) (11,100)
Purchase of bank premises and equipment ............ (338,093) (347,102)
Proceeds from sales of available-for-sale securities 7,964,033 2,499,873
Proceeds from maturities, calls and paydowns of
held-to-maturity securities ...................... 4,227,040 6,086,466
Proceeds from maturities, calls and paydowns of
available-for-sale securities .................... 8,513,718 5,719,746
Purchase of held-to-maturity securities ............ (265,000) (281,315)
Purchase of available-for-sale securities .......... (23,884,659) (20,237,168)
Payment for purchase of American Federal Savings
and Loan, net of cash acquired ................... (2,094,886) --
------------ ------------
Net cash used in investing activities ........ (25,563,207) (17,871,691)
------------ ------------
</TABLE>
See Notes to Consolidated Financial Statements
-6-
<PAGE>
<TABLE>
<CAPTION>
MID-MISSOURI HOLDING COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS, Continued
YEARS ENDED DECEMBER 31, 1997 and 1996
1997 1996
------------ ------------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in time deposits .................... $ 9,760,296 $ 11,470,999
Net increase (decrease) in demand, savings, NOW
and money market deposits ...................... 179,060 (2,184,554)
Net increase (decrease) in federal funds purchased (950,000) 3,100,000
Net increase in other borrowings from the Federal
Home Loan Bank ................................. 16,079,014 1,000,000
Net increase (decrease) in securities sold under
agreements to repurchase ....................... (326,936) 3,934,009
Dividends paid ................................... (462,722) (400,026)
------------ ------------
Net cash provided by financing activities .. 24,278,712 16,920,428
------------ ------------
INCREASE IN CASH AND
DUE FROM BANKS ................................... 544,119 245,528
CASH AND DUE FROM BANKS,
BEGINNING OF YEAR ................................ 3,764,390 3,518,862
------------ ------------
CASH AND DUE FROM BANKS,
END OF YEAR ...................................... $ 4,308,509 $ 3,764,390
============ ============
</TABLE>
See Notes to Consolidated Financial Statements
-7-
<PAGE>
MID-MISSOURI HOLDING COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
FINANCIAL STATEMENT PRESENTATION AND NATURE OF OPERATIONS
- ---------------------------------------------------------
Mid-Missouri Holding Company, Inc. (Company) is a bank holding company with a
wholly-owned subsidiary, Bank of Sullivan (Bank).
The Bank is primarily engaged in providing a full range of banking and
mortgage services to individual and corporate customers in Sullivan, Missouri
and surrounding communities. The Bank is subject to competition from other
financial institutions. The Bank also is subject to the regulation of certain
federal and state agencies and undergoes periodic examinations by those
regulatory authorities.
USE OF ESTIMATES
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Material estimates that are particularly susceptible to significant change
relate to the determination of the allowance for loan losses and the valuation
of real estate acquired in connection with foreclosures or in satisfaction of
loans. In connection with the determination of the allowance for loan losses
and the valuation of foreclosed assets held-for-sale, management obtains
independent appraisals for significant properties.
Management believes that the allowance for losses on loans and the valuation
of foreclosed assets held-for-sale are adequate. While management uses
available information to recognize losses on loans and foreclosed assets held-
for-sale, changes in economic conditions may necessitate revision of those
estimates in future years. In addition, various regulatory agencies, as an
integral part of their examination process, periodically review the Bank's
allowance for losses on loans and valuation of foreclosed assets held-for-sale.
Such agencies may require the Bank to recognize additional losses based on their
judgments of information available to them at the time of their examination.
-8-
<PAGE>
MID-MISSOURI HOLDING COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (Continued)
PRINCIPLES OF CONSOLIDATION
- ---------------------------
The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiary. All significant intercompany accounts and
transactions have been eliminated in consolidation.
CASH EQUIVALENTS
- ----------------
The Bank considers all liquid investments with original maturities of three
months or less to be cash equivalents.
INVESTMENTS IN DEBT AND EQUITY SECURITIES
- -----------------------------------------
Available-for-sale securities, which include any security for which the Bank
has no immediate plans to sell, but which may be sold in the future, are carried
at fair value. Realized gains and losses, based on the amortized cost of the
specific security, are included in other income. Unrealized gains and losses
are recorded, net of related income tax effects, in stockholders' equity.
Premiums and discounts are amortized and accreted, respectively, to interest
income using the level-yield method over the period to maturity.
Held-to-maturity securities, which include any security for which the Bank has
the positive intent and ability to hold until maturity, are carried at
historical cost adjusted for amortization of premiums and accretion of
discounts. Premiums and discounts are amortized and accreted, respectively, to
interest income using the level-yield method over the period to maturity.
Interest and dividends on investments in debt and equity securities are
included in income when earned.
LOANS
- -----
Loans that management has the intent and ability to hold for the foreseeable
future or until maturity or pay-offs are reported at their outstanding principal
adjusted for any charge-offs, the allowance for loan losses, and any deferred
fees or costs on originated loans and unamortized premiums or discounts on
purchased loans.
-9-
<PAGE>
MID-MISSOURI HOLDING COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (Continued)
ALLOWANCES FOR LOAN LOSSES
- --------------------------
The allowance for loan losses is increased by provisions charged to expense
and reduced by loans charged off, net of recoveries. The allowance is
maintained at a level considered adequate to provide for potential loan losses,
based on management's evaluation of the loan portfolio, as well as on prevailing
and anticipated economic conditions and historical losses by loan category.
General allowances have been established, based upon the aforementioned factors,
and allocated to the individual loan categories. Allowances are accrued on
specific loans evaluated for impairment for which the basis of each loan,
including accrued interest, exceeds the discounted amount of expected future
collections of interest and principal or, alternatively, the fair value of loan
collateral.
A loan is considered impaired when it is probable that the Bank will not
receive all amounts due according to the contractual terms of the loan. This
includes loans that are delinquent 90 days or more unless the loan is well
secured and in the process of collection, (nonaccrual loans) and certain other
loans identified by management. Accrual of interest is discontinued on
nonaccrual loans, and interest accrued and unpaid is removed, at the time such
amounts are delinquent 90 days. Interest is recognized for nonaccrual loans
only upon receipt, and only after all principal amounts are current according to
the terms of the contract.
BANK PREMISES AND EQUIPMENT
- ---------------------------
Bank premises and equipment are stated at cost, less accumulated depreciation.
Depreciation is charged to expense using the straight-line method over the
estimated useful lives of the assets.
FORECLOSED ASSETS HELD-FOR-SALE
- -------------------------------
Assets acquired by foreclosure or in settlement of debt and held-for-sale are
valued at fair value as of the date of foreclosure and a related valuation
allowance is provided for estimated costs to sell the assets. Management
evaluates the value of foreclosed assets held-for-sale periodically and
increases the valuation allowance for any subsequent declines in estimated fair
value. Increases in the valuation allowance and gains/losses on sales of
foreclosed assets are included in non-interest expense, net.
-10-
<PAGE>
MID-MISSOURI HOLDING COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (Continued)
EXCESS OF COST OVER FAIR VALUE OF NET ASSETS ACQUIRED
- -----------------------------------------------------
Unamortized costs of a purchased subsidiary (subsequently merged with the
Bank-See Note 16) in excess of the fair value of the net tangible assets
acquired aggregated $759,256 (net of amortization of $26,228) and are being
amortized on a 15 year period using the straight-line method.
The excess of purchase price over the net assets of the branch acquired were
$619,215 (net of amortization of $171,271) and are being amortized on a
straight-line basis over a period of 15 years.
Amortization expense related to the purchased subsidiary and the branch was
$78,882 and $52,699 for 1997 and 1996, respectively.
INCOME TAXES
- ------------
Deferred tax liabilities and assets are recognized for the tax effects of
differences between the financial statement and tax bases of assets and
liabilities. A valuation allowance is established to reduce deferred tax assets
if it is more likely than not that a deferred tax asset will not be realized.
FEES
- ----
Loan origination fees, net of direct origination costs are recognized as
income using the level-yield method over the term of the loan.
RECLASSIFICATIONS
- -----------------
Certain reclassifications have been made to the 1996 financial statements to
conform to the 1997 financial statement presentation. These reclassifications
have no effect on net earnings.
EARNINGS PER SHARE
- ------------------
Earnings per share is computed based on the weighted average number of shares
outstanding during the year, which totaled 215,681 for 1997 and 200,000 for
1996. Diluted earnings per share is not presented because the Company had no
potential common shares outstanding during either period.
-11-
<PAGE>
MID-MISSOURI HOLDING COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
NOTE 2: INVESTMENT IN DEBT AND EQUITY SECURITIES
The amortized cost and approximate fair value of available-for-sale
securities are as follows:
<TABLE>
<CAPTION>
December 31, 1997
------------------
Gross Gross Approximate
Amortized Unrealized Unrealized Fair
Cost Gains (Losses) Value
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
U.S. Treasury .................. $ 1,526,804 $ 22,709 $ (3,507) $ 1,546,006
State and political subdivisions 7,751,045 196,232 (3,677) 7,943,600
U.S. Government agencies
and corporations ............. 21,974,292 134,357 (9,057) 22,099,592
Mortgage-backed securities ..... 7,124,500 32,800 (23,743) 7,133,557
Other investments .............. 540,592 157,299 (6,580) 691,311
------------ ------------ ------------ ------------
$ 38,917,233 $ 543,397 $ (46,564) $ 39,414,066
============ ============ ============ ============
December 31, 1996
----------------------------------------------------------
Gross Gross Approximate
Amortized Unrealized Unrealized Fair
Cost Gains (Losses) Value
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
U.S. Treasury .................. $ 2,239,086 $ 1,286 $ (1,314) $ 2,239,058
State and political subdivisions 5,994,427 5,688 (39,869) 5,960,246
U.S. Government agencies
and corporations ............. 10,742,098 112,741 (4,067) 10,850,772
Mortgage-backed securities ..... 4,392,937 17,838 (45,337) 4,365,438
Other investments .............. 101,580 -- (19,580) 82,000
------------ ------------ ------------ ------------
$ 23,470,128 $ 137,553 $ (110,167) $ 23,497,514
============ ============ ============ ============
</TABLE>
-12-
<PAGE>
MID-MISSOURI HOLDING COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
NOTE 2: INVESTMENT IN DEBT AND EQUITY SECURITIES (Continued)
Maturities of available-for-sale securities at December 31, 1997:
<TABLE>
<CAPTION>
Approximate
Amortized Fair
Cost Value
----- -----
<S> <C> <C>
One year or less ................ $ 3,071,400 $ 3,090,341
After one through five years .... 14,940,619 15,167,219
After five through ten years .... 11,808,435 11,994,460
After ten years ................. 1,972,279 2,028,489
Not due on a single maturity date 7,124,500 7,133,557
----------- -----------
$38,917,233 $39,414,066
=========== ===========
</TABLE>
The amortized cost and approximate fair value of held-to-maturity securities
are as follows:
<TABLE>
<CAPTION>
December 31, 1997
-----------------------------------------------------------
Gross Gross Approximate
Amortized Unrealized Unrealized Fair
Cost Gains (Losses) Value
----------- ------------ --------------- ------------
<S> <C> <C> <C> <C>
U.S. Treasury .................. $ 498,010 $ 7,145 $ -- $ 505,155
State and political subdivisions 5,160,316 87,382 -- 5,247,698
U.S. Government agencies
and corporations ............. 2,910,460 215,072 -- 3,125,532
Mortgage-backed securities ..... 3,806,362 138,929 -- 3,945,291
----------- ----------- --------------- -----------
$12,375,148 $ 448,528 $ -- $12,823,676
=========== =========== =============== ===========
<CAPTION>
December 31, 1996
-----------------------------------------------------------
Gross Gross Approximate
Amortized Unrealized Unrealized Fair
Cost Gains (Losses) Value
------------ ------------ ------------- ------------
<S> <C> <C> <C> <C>
U.S. Treasury .................. $ 2,959,522 $ 52,733 $ -- $ 3,012,255
State and political subdivisions 5,474,477 1,681 (12,042) 5,464,116
U.S. Government agencies
and corporations ............. 3,595,514 53,083 (39,889) 3,608,708
Mortgage-backed securities ..... 4,172,669 154,434 -- 4,327,103
------------ ------------ ------------- ------------
$ 16,202,182 $ 261,931 $ (51,931) $ 16,412,182
============ ============ ============= ============
</TABLE>
-13-
<PAGE>
MID-MISSOURI HOLDING COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
NOTE 2: INVESTMENT IN DEBT AND EQUITY SECURITIES (Continued)
Maturities of held-to-maturity securities at December 31, 1997:
<TABLE>
<CAPTION>
Approximate
Amortized Fair
Cost Value
---- -----
<S> <C> <C>
One year or less ................ $ 3,046,437 $ 3,228,515
After one through five years .... 2,648,234 2,670,181
After five through ten years .... 1,889,725 1,931,199
After ten years ................. 984,390 1,048,490
Not due on a single maturity date 3,806,362 3,945,291
----------- -----------
$12,375,148 $12,823,676
=========== ===========
</TABLE>
Securities pledged as collateral, to secure public deposits and for other
purposes, at December 31, 1997 and 1996, totaled:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Amortized cost ....... $15,242,570 $13,141,817
Approximate fair value $15,402,009 $13,031,345
</TABLE>
Proceeds from sales of available-for-sale securities were $7,964,033 for 1997
resulting in gross gains of $86,720 and gross losses of $113,979. Proceeds from
calls of debt securities were $2,183,092 for 1997 resulting in gross gains of
$10,604. Proceeds from calls of debt securities were $3,010,423 for 1996,
resulting in gross gains of $9,143 and gross losses of $846.
-14-
<PAGE>
MID-MISSOURI HOLDING COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
NOTE 3: LOANS AND ALLOWANCE FOR LOAN LOSSES
Composition of the loan portfolio as of December 31, 1997 and 1996, includes:
1997 1996
---- ----
Real estate - mortgage ....... $76,659,257 $53,624,764
Real estate - construction ... 4,648,932 2,526,476
Commercial loans ............. 11,695,411 10,270,389
Consumer and other loans ..... 6,687,365 6,699,659
----------- -----------
99,690,965 73,121,288
Less allowance for loan losses 725,320 511,920
----------- -----------
$98,965,645 $72,609,368
=========== ===========
Impaired loans totaled $289,293 and $169,894 at December 31, 1997 and 1996,
respectively. An allowance for loan losses of $44,554 and $21,350 relates to
impaired loans of $289,293 and $169,894 at December 31, 1997 and 1996,
respectively.
Interest recognized on average impaired loans of $274,500 and $170,001 for
1997 and 1996, respectively. was nominal. No interest was recognized on
impaired loans on a cash basis during 1997 and 1996.
Activity in the allowance for loan losses was as follows:
1997 1996
Balance, beginning of year ................ $ 511,920 $ 599,553
Provision charged to expense .............. 230,000 --
Loans charged off, net of recoveries
of $101,604 for 1997 and $49,316 for 1996 (16,600) (87,633)
--------- ---------
Balance, end of year ...................... $ 725,320 $ 511,920
========= =========
-15-
<PAGE>
MID-MISSOURI HOLDING COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
NOTE 4: BANK PREMISES AND EQUIPMENT
Major classifications of premises and equipment, stated at cost, are as
follows:
1997 1996
---- ----
Land ........................... $ 70,000 $ --
Buildings and improvements ..... 2,807,831 2,225,860
Equipment ...................... 1,967,994 1,640,905
---------- ----------
4,845,825 3,866,765
Less accumulated depreciation .. 2,462,545 1,847,350
---------- ----------
Net premises and equipment $2,383,280 $2,019,415
========== ==========
NOTE 5: INTEREST-BEARING DEPOSITS
At December 31, 1997, the scheduled maturities of certificates of deposit
are as follows:
1998 $55,827,322
1999 10,540,193
2000 5,258,079
-----------
$71,625,594
===========
NOTE 6: INCOME TAXES
The provision for income taxes consists of:
1997 1996
---- ----
Taxes currently payable $ 545,731 $ 450,139
Deferred income taxes . (125,321) 9,000
--------- ---------
$ 420,410 $ 459,139
========= =========
A reconciliation of income tax expense at the statutory rate to the
Company's actual income tax expense is shown below:
-16-
<PAGE>
MID-MISSOURI HOLDING COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
NOTE 6: INCOME TAXES (Continued)
1997 1996
---- ----
Computed at the statutory rate (34%) .. $ 553,000 $ 535,000
Increase (decrease) resulting from:
Non-taxable interest income ....... (176,000) (111,000)
State income taxes - net of federal
tax benefit ................... 40,000 36,000
Other ............................. 3,410 (861)
--------- ---------
Actual tax provision .................. $ 420,410 $ 459,139
========= =========
The tax effects of temporary differences related to deferred taxes shown on
the December 31, 1997 and 1996 balance sheets were:
<TABLE>
<CAPTION>
1997 1996
--------- ---------
<S> <C> <C>
Deferred tax assets:
Allowance for loan losses ................................ $ 190,690 $ 124,124
Unrealized depreciation on
investment securities ................................. -- 89,576
Other .................................................... 173,463 49,569
364,153 263,269
Deferred tax liabilities:
Unrealized appreciation on available-for-sale securities (192,759) --
Accumulated depreciation ................................ (52,044) (52,762)
Other ................................................... (32,350) (33,851)
--------- ---------
277,153 (86,613)
--------- ---------
Net deferred tax asset .............................. $ 87,000 $ 176,656
========= =========
</TABLE>
NOTE 7: RISK CONCENTRATION - FEDERAL FUNDS
From time to time, the Bank has excess deposits or a need for additional
funds. Excess deposits are loaned to other banks as federal funds sold, which
represent overnight lending to other member banks of the Federal Reserve System.
Additional funds are borrowed from other member banks as federal funds
purchased, which represent overnight borrowing.
At December 31, 1997 and 1996, $2,200,000 and $3,150,000 of federal funds
purchased related to one bank in the St. Louis, Missouri area.
-17-
<PAGE>
MID-MISSOURI HOLDING COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
NOTE 8: SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
The Bank enters into sales of securities under agreements to repurchase.
Repurchase agreements are treated as financings, and the obligations to
repurchase securities sold are reflected as a liability in the statement of
financial condition. The securities underlying the agreements are book-entry
securities. At December 31, 1997 and 1996, these agreements had a weighted-
average interest rate of 5.01% and matured within 90 days.
Securities sold under agreements to repurchase consist of U.S. treasury and
U.S. agency securities with book values of $10,433,450 and $10,760,386 and fair
values of $10,496,188 and $10,296,906 at December 31, 1997 and 1996,
respectively. Accrued interest receivable on these securities was $185,475 and
$228,411 at December 31, 1997 and 1996, respectively.
At December 31, 1997 and 1996, all of the agreements were agreements to
repurchase the same securities. Securities sold under agreements to repurchase
averaged $10,713,687 and $8,856,262 during 1997 and 1996, respectively, and the
maximum amount outstanding at any month-end during 1997 and 1996, was
$12,191,254 and $10,760,386, respectively.
NOTE 9: OTHER BORROWINGS
At December 31, 1997, the Bank had twelve loans aggregating $17,079,014 from
the Federal Home Loan Bank. (FHLB). The loans are secured by a blanket
assignment of 1-4 family home mortgage loans held by the Bank and bear interest
at a weighted average rate of 6.39%. The agreements with the FHLB have
maturities ranging from July 2, 1998 to December 12, 2012.
NOTE 10: OFF-BALANCE-SHEET AND CREDIT RISK
The Bank is a party to financial instruments with off-balance-sheet risk in
the normal course of business to meet the financing needs of its customers.
These financial instruments include lines-of-credit, commitments to extend
credit and letters of credit. The Bank's maximum exposure to credit loss under
lines of credit, commitments to extend credit and letters of credit is
represented by the contractual amount of those instruments. The Bank uses the
same credit policies in making commitments and conditional obligations as it
does for on-balance-sheet instruments.
-18-
<PAGE>
MID-MISSOURI HOLDING COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
NOTE 10: OFF-BALANCE-SHEET AND CREDIT RISK (Continued)
Financial instruments whose contract amounts represent potential credit risk:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Lines of credit...................................... $9,273,071 $7,521,573
Commitments to extend credit......................... $3,011,890 $1,561,179
Letters of credit.................................... $ 851,939 $ 527,910
</TABLE>
The Bank requires collateral to support financial instruments when it is
deemed necessary. The Bank evaluates each customer's creditworthiness on a
case-by-case basis. The amount of collateral obtained upon extension of credit
is based on management's credit evaluation of the counterparty. Collateral
held varies, but may include income-producing commercial properties; accounts
receivable; property, plant and equipment; and inventory.
Commitments to extend credit and lines of credit are agreements to lend to a
customer so long as there is no violation of any condition established in the
lending contract. Lines of credit generally have fixed expiration dates or
other termination clauses and may require payment of a fee. Since some of the
commitments may expire without being drawn upon, the total commitment amounts do
not necessarily represent future cash requirements.
Letters of credit are conditional commitments issued by the Bank to guarantee
the performance of a customer to a third party. Those guarantees are primarily
issued to support public and private borrowing agreements. Management does not
anticipate any material losses as a result of these transactions. The credit
risk involved in issuing letters of credit is essentially the same as that
involved in extending loan facilities to customers.
At December 31, 1997, all of the Bank's credit commitments expire at various
times through 2025.
-19-
<PAGE>
MID-MISSOURI HOLDING COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
NOTE 11: REGULATORY MATTERS
The Company and the Bank are subject to various regulatory capital
requirements administered by the federal banking agencies. Failure to meet
minimum capital requirements can initiate certain mandatory--and possibly
additional discretionary--actions by regulators that, if undertaken, could have
a direct material effect on the Company's financial statements. Under capital
adequacy guidelines and the regulatory framework for prompt corrective action,
the Company and the Bank must meet specific capital guidelines that involve
quantitative measures of assets, liabilities, and certain off-balance-sheet
items as calculated under regulatory accounting practices. The Company's and
the Bank's capital amounts and classification are also subject to qualitative
judgments by the regulators about components, risk weightings, and other
factors.
Quantitative measures established by regulation to ensure capital adequacy
require the Company and the Bank to maintain minimum amounts and ratios (set
forth in the table below) of total and Tier I capital (as defined in the
regulations) to risk-weighted assets (as defined), and of Tier I capital (as
defined) to average assets (as defined). Management believes, as of December
31, 1997, that the Company and the Bank meet all capital adequacy requirements
to which it is subject.
As of December 31, 1997, the most recent notification from the Federal Deposit
Insurance Corporation categorized the Bank as well capitalized under the
regulatory framework for prompt corrective action. To be categorized as well
capitalized the Bank must maintain minimum total risk-based, Tier I risk-based,
and Tier I leverage ratios as set forth in the table. There are no conditions
or events since that notification that management believes have changed the
Company's or the Bank's category.
The Company's and the Bank's actual capital amounts and ratios are also
presented in the table.
<TABLE>
<CAPTION>
TO BE WELL
CAPITALIZED UNDER
FOR CAPITAL PROMPT CORRECTIVE
ACTUAL ADEQUACY PURPOSES ACTION PROVISIONS
---------------------- ----------------- ----------------------
AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
AS OF DECEMBER 31, 1997:
Total Capital
(to Risk Weighted Assets)
Consolidated ....................... $12,182,509 13.5% $ 7,236,160 8.0% $ N/A
Bank of Sullivan ................... $12,128,719 13.4% $ 7,236,160 8.0% $ 9,045,200 10.0%
Tier I Capital
(to Risk Weighted Assets)
Consolidated ....................... $11,357,189 12.6% $ 3,618,080 4.0% $ N/A
Bank of Sullivan ................... $11,303,399 12.5% $ 3,618,080 4.0% $ 5,427,120 6.0%
Tier I Capital
(to Average Assets)
Consolidated ....................... $11,357,189 7.2% $ 6,329,480 4.0% $ N/A
Bank of Sullivan ................... $11,303,399 7.1% $ 6,329,480 4.0% $ 7,911,850 5.0%
</TABLE>
-20-
<PAGE>
MID-MISSOURI HOLDING COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
NOTE 11: REGULATORY MATTERS (Continued)
<TABLE>
<CAPTION>
TO BE WELL
CAPITALIZED UNDER
FOR CAPITAL PROMPT CORRECTIVE
ACTUAL ADEQUACY PURPOSES ACTION PROVISIONS
---------------------- ------------------- --------------------
AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
AS OF DECEMBER 31, 1996:
Total Capital
(to Risk Weighted Assets)
Consolidated ..................... $9,655,967 14.1% $5,482,000 8.0% N/A
Bank of Sullivan ................. $9,620,548 14.0% $5,482,000 8.0% $6,852,500 10.0%
Tier I Capital
(to Risk Weighted Assets)
Consolidated ..................... $9,044,047 13.2% $2,741,000 4.0% N/A
Bank of Sullivan ................. $9,008,628 13.1% $2,741,000 4.0% $4,111,500 6.0%
Tier I Capital
(to Average Assets)
Consolidated ..................... $9,044,047 8.1% $4,448,475 4.0% N/A
Bank of Sullivan ................. $9,008,628 8.1% $4,448,475 4.0% $5,560,594 5.0%
</TABLE>
The Bank is also subject to certain restrictions on the amount of dividends
that it may declare without prior regulatory approval. At December 31, 1997,
approximately $544,844 of retained earnings were available for dividend
declaration without prior regulatory approval.
NOTE 12: TRANSACTIONS WITH RELATED PARTIES
At December 31, 1997 and 1996, the Bank had loans totaling $2,352,951, and
$2,395,016, respectively, to employees, officers, directors, principal
stockholders and affiliated companies. In management's opinion, such loans were
made in the ordinary course of business, and were made on substantially the same
terms (including interest rates and collateral) as those prevailing at the time
for comparable transactions with other persons.
-21-
<PAGE>
MID-MISSOURI HOLDING COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
NOTE 13: PENSION PLAN
Substantially all eligible employees are covered by the Bank's defined benefit
pension plan. The Bank has not adopted Statement of Financial Accounting
Standards No. 87, "Employer's Accounting for Pensions" (FAS87) and reports and
funds pension expense based on amounts deductible for income tax purposes.
These amounts are computed using the Entry Age Normal FIL actuarial method.
Management believes that this method is generally more conservative than
actuarial calculations under FAS87, and the differences between the two methods
are not material to the Bank's financial statements. Pension expense totaled
$68,717 and $46,066, 1997 and 1996, respectively. As of September 1, 1997, the
most recent valuation date, the actuary reported the following information for
funding purposes with respect to the Plan.
1997
----
Accumulated plan benefits . $266,692
Actuarial accrued liability $571,298
Plan assets ............... $352,849
NOTE 14: ADDITIONAL CASH FLOW INFORMATION
1997 1996
---- ----
NONCASH INVESTING ACTIVITIES
- ----------------------------
Other assets acquired
through repossession $ 200 $1,867
====== ======
The Company purchased all of the capital stock of American Federal
Savings and Loan Association of Sullivan for $4,521,282. In conjunction with
the acquisition, liabilities were assumed as follows:
Fair value of assets acquired ... $ 17,643,424
Cash paid for the common stock .. (2,244,176)
Fair value of common stock issued (2,277,106)
------------
Liabilities assumed .... $ 13,122,142
============
-22-
<PAGE>
MID-MISSOURI HOLDING COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
NOTE 14: ADDITIONAL CASH FLOW INFORMATION, Continued
ADDITIONAL CASH PAYMENT INFORMATION
- -----------------------------------
Interest paid ............... $5,497,996 $3,873,141
Income taxes paid ........... $ 517,751 $ 518,312
NOTE 15: DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair value of
each class of financial instruments:
CASH AND CASH EQUIVALENTS
- -------------------------
For these short-term instruments, the carrying amount approximates fair value.
INVESTMENT SECURITIES
- ---------------------
Fair values for investment securities equal quoted market prices, if
available. If quoted market prices are not available, fair values are estimated
based on quoted market prices of similar securities.
LOANS
- -----
The fair value of loans is estimated by discounting the future cash flows
using the current rates at which similar loans would be made to borrowers with
similar credit ratings and for the same remaining maturities. Loans with
similar characteristics were aggregated for purposes of the calculations. The
carrying amount of accrued interest approximates its fair value.
-23-
<PAGE>
MID-MISSOURI HOLDING COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
NOTE 15: DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS,
(Continued)
DEPOSITS
- --------
The fair value of demand deposits, savings accounts, NOW accounts, and certain
money market deposits is the amount payable on demand at the reporting date
(i.e., their carrying amount). The fair value of fixed-maturity time deposits
is estimated using a discounted cash flow calculation that applies the rates
currently offered for deposits of similar remaining maturities. The carrying
amount of accrued interest payable approximates its fair value.
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE AND OTHER BORROWINGS
- -------------------------------------------------------------------
For these short-term instruments, the carrying amount is a reasonable estimate
of fair value.
COMMITMENTS TO EXTEND CREDIT, LETTERS OF CREDIT AND LINES OF CREDIT
- -------------------------------------------------------------------
The fair value of commitments is estimated using the fees currently charged to
enter into similar agreements, taking into account the remaining terms of the
agreements and the present creditworthiness of the counterparties. For fixed-
rate loan commitments, fair value also considers the difference between current
levels of interest rates and the committed rates. The fair value of letters of
credit and lines of credit is based on fees currently charged for similar
agreements or on the estimated cost to terminate or otherwise settle the
obligations with the counterparties at the reporting date.
-24-
<PAGE>
MID-MISSOURI HOLDING COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
NOTE 15: DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
(Continued)
FAIR VALUE TABLE
- ----------------
The following table presents estimated fair values of the Bank's financial
instruments. The fair values of certain of these instruments were calculated by
discounting expected cash flows, which method involves significant judgments by
management and uncertainties. Fair value is the estimated amount at which
financial assets or liabilities could be exchanged in a current transaction
between willing parties, other than in a forced or liquidation sale. Because no
market exists for certain of these financial instruments and because management
does not intend to sell these financial instruments, the Bank does not know
whether the fair values shown below represent values at which the respective
financial instruments could be sold individually or in the aggregate.
<TABLE>
<CAPTION>
DECEMBER 31, 1997
-----------------------------
CARRYING FAIR
AMOUNT VALUE
------ -----
<S> <C> <C>
Financial assets:
Cash and due from banks .............................. $ 4,308,509 $ 4,308,509
Available-for-sale securities ........................ $ 39,414,066 $ 39,414,066
Held-to-maturity securities .......................... $ 12,375,148 $ 12,823,676
Loans, net of allowance for loan loses ............... $ 98,965,645 $ 98,813,000
Financial liabilities:
Deposits ............................................. $118,709,277 $118,914,000
Federal funds purchased .............................. $ 2,200,000 $ 2,200,000
Securities sold under agreements to repurchase ....... $ 10,433,450 $ 10,496,188
Other borrowings from the Federal Home
Loan Bank ....................................... $ 17,079,014 $ 17,079,014
Unrecognized financial instruments (net of contract amount):
Commitments to extend credit ......................... $ -- $ --
Letters of credit .................................... $ -- $ --
Lines of credit ...................................... $ -- $ --
</TABLE>
-25-
<PAGE>
MID-MISSOURI HOLDING COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
NOTE 16: BUSINESS ACQUISITIONS
On June 30, 1997, the Company acquired all the outstanding shares of American
Federal Savings and Loan Association of Sullivan for $4,521,282, including
$2,241,996 in cash and 31,361 shares of common stock. The acquisition has been
accounted for as a purchase by recording the assets and liabilities of the
acquiree at their estimated fair values at the acquisition date. The
consolidated operations of the Company include the operations of the acquiree,
which was liquidated into another subsidiary, from the acquisition date.
Unaudited pro forma consolidated operations assuming the purchase was made at
the beginning of each year are shown below:
1997 1996
----------- -----------
Interest Income ........ $11,272,428 $ 9,542,508
Net Income ............. $ 1,294,589 $ 1,162,382
Basic earnings per share $ 5.60 $ 5.03
The pro forma results are not necessarily indicative or what would have
occurred had the acquisition been on those dates, nor are they necessarily
indicative of future operations.
Pro forma data reflect the adjusted depreciation from revaluing American
Federal Savings and Loan Association of Sullivan's property and equipment and
also additional interest expense related to the financing of the purchase.
NOTE 17: OTHER EXPENSES
Other expenses include the following. Individual expenses exceeding 1% of
total revenue are shown separately.
1997 1996
---------- ----------
Depreciation expense ...... $ 183,508 $ 162,939
Stationary and printing ... 113,844 105,214
Legal and professional fees 214,078 155,798
Other ..................... 1,137,667 1,058,608
---------- ----------
$1,649,097 $1,482,559
========== ==========
<PAGE>
REGULATION S-B EXHIBIT
EXHIBIT 3(I)
<PAGE>
ARTICLES OF INCORPORATION
-------------------------
OF
--
MID-MISSOURI HOLDING COMPANY, INC.
----------------------------------
HONORABLE JUDITH K. MORIARTY
SECRETARY OF STATE
STATE OF MISSOURI
JEFFERSON CITY, MISSOURI 65102
The undersigned natural persons of the age of eighteen (18) years or more
for the purpose of forming a Corporation under The General and Business
Corporation Law of Missouri hereby adopt the following Articles of
Incorporation:
ARTICLE ONE
-----------
The name of the Corporation is Mid-Missouri Holding Company, Inc.
ARTICLE TWO
-----------
The address, including street and number, if any, of the Corporation's
initial registered office in this State is 7733 Forsyth, Twelfth Floor, Clayton,
Missouri 63105, and the name of its initial registered agent at such address is
Joseph T. Porter, Jr.
ARTICLE THREE
-------------
The aggregate number of shares which the Corporation shall have authority
to issue shall be TWO HUNDRED THOUSAND (200,000) shares, which shall be each of
Ten Dollars ($10.00) par value, and all of said shares to be COMMON SHARES.
ARTICLE FOUR
------------
The extent to which the preemptive rights of shareholders to acquire
additional shares are granted, limited or denied is as follows:
No holder of any stock of the Corporation shall be entitled, as a matter of
right, to purchase, subscribe for, or otherwise acquire any new or additional
shares of stock of the Corporation of any class, or any
<PAGE>
options or warrants to purchase, subscribe for or otherwise acquire any such new
or additional shares, or any shares, bonds, notes, debentures, or other
securities convertible into or carrying options or warrants to purchase,
subscribe for or otherwise acquire any such new or additional shares.
ARTICLE FIVE
------------
The name and place of residence of each incorporator is as follows:
Joseph T. Porter, Jr. 7733 Forsyth, 12th Floor
Clayton, MO 63105
ARTICLE SIX
-----------
The number of Directors to constitute the first Board of Directors is ten
(10). Thereafter, the number of Directors shall be fixed by or in the manner
provided for in the By-Laws of the Corporation. Any changes in the number of
Directors will be reported to the Secretary of State within thirty (30) calendar
days after any such change.
In all elections of Directors of this Corporation, each shareholders shall
have the right to cast as many votes as shall equal (x) the number of such
shares held by him multiplied by (y) the number of Directors to be elected, and
he may cast all of such votes for a single Director or may distribute them among
the number of Directors to be elected, or any two (2) or more of them, as such
shareholder may deem fit.
ARTICLE SEVEN
-------------
The duration of the Corporation is perpetual.
Articles of Incorporation Page 2
<PAGE>
ARTICLE EIGHT
-------------
The Corporation is formed for the following PURPOSES and POWERS, to-wit:
(A) To operate a financial services organization and to acquire, operate,
and/or dispose of banking and banking-related subsidiaries, and including all
aspects thereof and all acts and actions incidental thereto.
(B) To buy, sell, procure, franchise, and dispose of all kinds of
merchandise, furniture, machinery, supplies and products, and generally to
engage in and conduct any form of service or mercantile enterprise not contrary
to law.
(C) To apply for, secure, acquire by assignment, transfer, purchase or
otherwise, and to exercise, carry out and enjoy any charter and license,
including but not limited to, patent, copyright, power, authority, franchise,
concession, rights or privileges, which any government or authority or any
corporation or other public body may be empowered to grant; and to pay for, aid
in and contribute toward carrying the same into effect and to appropriate any of
the Corporation's shares of stock, bonds and assets to defray the necessary
costs, charges and expenses thereof.
(D) To borrow and loan money with or without security and to issue, sell,
or pledge bonds, promissory notes, debentures and other obligations and
evidences of indebtedness secured or unsecured.
(E) To contract with any person, firm, corporation, association or entity.
(F) To acquire the goodwill, rights, and property and to undertake the
whole or any part of the assets or liabilities of any person, firm, association
or corporation, to pay for the same in cash, the stock of this Corporation,
bonds or otherwise; to hold or in any manner to dispose of the whole or any part
of the property so purchased; to conduct in any lawful manner the whole or any
part of any business so acquired, and to
Articles of Incorporation Page 3
<PAGE>
exercise all the powers necessary or convenient in and about the conduct and
management of such business.
(G) To purchase, hold, sell, assign, transfer, mortgage, pledge, or
otherwise hold and possess or otherwise dispose of, shares of capital stock of,
or any bonds, securities, or evidence of indebtedness created by any other
corporation or corporations of this state or any other state, country, nation or
government, and while owner of said stock to exercise all the rights, power, and
privileges of ownership including the right to vote thereon.
(H) To purchase, acquire, use, lend, lease or hold, improve, operate,
hypothecate, mortgage, sell or convey, and otherwise deal in and dispose of
property of all kinds, both real and personal, including patents and patent
rights from the United States and/or foreign countries, license privileges,
inventions, franchises, improvement processes, copyrights, trademarks and trade
names, and service marks relating to or useful in connection with the business
of this Corporation.
(I) Subject to the limitations of The General and Business Corporation Law,
to purchase, hold, sell, transfer, dispose of or deal in shares of its own
capital stock.
(J) In general, and in addition to all of the foregoing, to carry on any
business in connection with the aforesaid powers and purposes, and, further, to
have and exercise all of the powers conferred by The General and Business
Corporation Law whether or not done in connection with the specific powers
hereinbefore set forth.
ARTICLE NINE
------------
Except as otherwise specifically provided by statute, all powers of
management and direct control of the Corporation shall be vested in the Board of
Directors.
The power to make, alter, amend or repeal the By-Laws of the Corporation
shall be vested in the Board of Directors. The exercise of
Articles of Incorporation Page 4
<PAGE>
such power shall require the affirmative vote of a majority of the Directors.
ARTICLE TEN
-----------
No contract or other transaction between this Corporation and any other
firm or corporation shall be affected or invalidated by reason of the fact that
any of the Directors or Officers of this Corporation are interested in or are
members, shareholders, directors, or officers of such other firm or corporation;
and any Director or Officer of this Corporation may be a party to or may be
interested in any contract or transaction of this Corporation in which this
Corporation is interested and no such contract or transaction shall be affected
or invalidated thereby; and each and every person who may become a Director or
Officer of this Corporation is hereby relieved from any liability as a result of
holding any such position that might otherwise exist from contracting or
transacting business with this Corporation for the benefit of such Director or
Officer or of any person, firm, association or corporation in which such
Director or Officer may be in anywise interested.
ARTICLE ELEVEN
--------------
The private property of the Shareholders of this Corporation shall not be
subject to the payment of corporate debts, except to the extent of any unpaid
balance of subscriptions for shares.
ARTICLE TWELVE
--------------
The power to amend and alter the Articles of Incorporation of the
Corporation shall be vested solely in the holders of the Class A common stock of
the Corporation (except to the extent that in certain circumstances the holders
of any other class of stock may be entitled by law to vote). This power may be
exercised (after such notice as may be
Articles of Incorporation Page 5
<PAGE>
required or waiver thereof) at any annual or special meeting of the holders of
the aforementioned shares by a vote of a majority of such shares as are issued
and outstanding and entitled to vote at such meeting.
ARTICLE THIRTEEN
----------------
Each Director or Officer, or former Director or Officer of this Corporation
and his legal representatives, shall be indemnified by the Corporation against
liabilities, expenses, counsel fees and costs reasonably incurred by him or his
estate in connection with, or arising out of, any action, suit, proceeding or
claim in which he is made a party by reason of his being or having been such
Director or Officer; and any person who, at the request of this Corporation
served as Director or Officer of another corporation in which this Corporation
owned corporate stock and his legal representative shall in like manner be
indemnified by this Corporation; provided, that in neither case shall the
Corporation indemnify such Director or Officer with respect to any matters as to
which he shall be finally adjudged in any such action, suit, or proceeding to
have been liable for negligence or misconduct in the performance of his duties
as such Director or Officer. The indemnification herein provided for, however,
shall apply also in respect of any amount paid in compromise of any such action,
suit, or proceeding or claim asserted against such Director or Officer
(including expenses, counsel fees, and costs reasonably incurred in connection
therewith), provided the Board of Directors shall have first approved such
proposed compromise settlement and determined that the Officer or Director
involved was not guilty of negligence or misconduct; but, in taking such action,
any Director involved shall not be qualified to vote thereon, and if for this
reason a quorum of the Board cannot be obtained to vote on such matters, it
shall be determined by a Committee of three or more persons appointed by the
Shareholders at a duly called special meeting or a regular meeting. In
determining whether or not a director or Officer was guilty of negligence or
misconduct in relation to any such matter, the Board of Directors or
Articles of Incorporation Page 6
<PAGE>
Committee, as the case may be, may rely conclusively upon an opinion of
independent counsel selected by such Board or Committee. The right to
indemnification herein provided shall not be exclusive of any other rights not
inconsistent herewith to which such Director or Officer may be entitled under
the By-Laws of the Corporation, any agreement with the Corporation, under law,
or otherwise.
IN WITNESS WHEREOF, these Articles of Incorporation have been executed on
this 29th day of December, 1993.
INCORPORATOR:
/s/ Joseph T. Porter, Jr.
---------------------------
Joseph T. Porter, Jr.
STATE OF MISSOURI )
) SS.
COUNTY OF ST. LOUIS )
I, Mary F. Giacoma, a Notary Public, do hereby certify that on this 29th of
December, 1993 personally appeared before me Joseph T. Porter, Jr., who, being
by me first duly sworn, declared that he is the person who signed the foregoing
document as Incorporator and that the statements therein contained are true.
/s/ Mary F. Giacoma
---------------------
Notary Public
My commission expires: 12/10/96
--------
Joseph T. Porter, Jr.
Suelthaus & Kaplan, P.C.
Attorney for Incorporator
7733 Forsyth, 12th Floor
St. Louis, Missouri 63105
Telephone: (314) 727-7676
FILED AND CERTIFICATE OF
INCORPORATION ISSUED
DEC 30, 1993
/s/ Judith K. Moriarty
Articles of Incorporation Page 7
<PAGE>
CERTIFICATE OF
AMENDMENT OF ARTICLES OF INCORPORATION
SECRETARY OF STATE
STATE OF MISSOURI
P.O. BOX 778
JEFFERSON CITY, MO 65102
Pursuant to the provisions of Section 351.095.2 of The General and Business
Corporation Law of Missouri, the undersigned corporation certifies the
following:
1. The present name of the corporation is Mid-Missouri Holding Company,
Inc. The name under which the corporation was originally organized was Mid-
Missouri Holding Company, Inc.
2. An amendment to the corporation's Articles of Incorporation was
adopted by the corporation's shareholders on February 28, 1997.
3. Article Three of the corporation's Articles of Incorporation is amended
to read as follows:
The aggregate number of shares which the Corporation shall have
authority to issue shall be THREE HUNDRED THOUSAND (300,000) shares, which
shall be each of Ten Dollars ($10.00) par value, and all of said shares to
be COMMON SHARES.
4. Of the 200,000 shares of stock of the corporation outstanding, 200,000
of such shares were entitled to vote on such amendment. The number of
outstanding shares of each class entitled to vote thereon as a class were as
follows:
<TABLE>
<CAPTION>
Number of
Class Outstanding Shares
---------------------------- ---------------------------------
<S> <C>
Common 200,000
5. The number of shares voted for and against the amendment was as
follows:
Class No. Voted For No. Voted Against
--------------- ----------------- ------------------------
Common 190, 010 -0-
</TABLE>
6. If the amendment provides for an exchange, reclassification, or
cancellation of issued shares, or a reduction of the number of authorized shares
of any class below the number of issued shares of that class, the following is a
statement of the manner in which such reduction is to be effected: N/A
Page 1
<PAGE>
7. The effective date of the amendment is to be the date of filing this
Certificate of Amendment with the Secretary of State.
IN WITNESS WHEREOF, the undersigned E. Milt Branum, Jr. has executed and
verified this instrument and the Secretary has affixed the corporate seal hereto
on the [5th] day of March, 1997.
ATTEST: MID-MISSOURI HOLDING COMPANY, INC.
/s/ Carol Markham By: /s/ E. Milt Branum, Jr.
- --------------------- -------------------------
Carol Markham, Secretary E. Milt Branum, Jr.,
President
STATE OF MISSOURI )
)SS
CITY OF ST. LOUIS )
I,____________________________________, a notary public, do hereby certify
that on this [5th] day of March, 1997, personally appeared before me E. Milt
Branum, Jr., who, being by me first duly sworn, declared that he is the
President of Mid-Missouri Holding Company, Inc., that he signed the foregoing
document as President of the corporation, and that the statements therein
contained are true.
_____________________________
Notary Public
Page 2
<PAGE>
REGULATION S-B EXHIBIT
EXHIBIT 3(II)
<PAGE>
BY-LAWS
OF
MID-MISSOURI HOLDING COMPANY, INC.
(A Missouri Corporation)
ARTICLE I Offices and Records
ARTICLE II Corporate Seal
ARTICLE III Shareholders
ARTICLE IV Directors
ARTICLE V Officers
ARTICLE VI Shares of Stock
ARTICLE VII Indemnification
ARTICLE VIII General Provisions
<PAGE>
ARTICLE I
Offices and Records
-------------------
Section 1. Registered Office and Registered Agent. The location of the
--------- --------------------------------------
registered office and the name of the registered agent of the corporation in the
State of Missouri shall be determined from time to time by the Board of
Directors and shall be on file in the appropriate office of the State of
Missouri pursuant to applicable provisions of law.
Section 2. Corporate Offices. The corporation may have such corporate
--------- -----------------
offices, anywhere within and without the State of Missouri as the Board of
Directors from time to time may appoint, or the business of the corporation may
require. The "principal place of business" or "principal business" or
"executive office or offices" of the corporation may be fixed and so designated
from time to time by the Board of Directors, but the location or residence of
the corporation in Missouri shall be deemed for all purposes to be in the county
in which its registered office in Missouri is maintained.
Section 3. Records. The corporation shall keep at its registered office
--------- -------
in Missouri, at its principal place of business, or at the office of its
transfer agent in Missouri, original or duplicate books in which shall be
recorded the number of its shares subscribed, the names of the owners of its
shares, the numbers owned of record by them respectively, the amount of shares
paid, and by whom, the transfer of said shares with the date of transfer, the
amount of its assets and liabilities, and the names and places of residence of
its officers, and from time to time such other or additional records,
statements, lists, and information as may be required by law, including the
shareholder lists mentioned in these By-laws.
Section 4. Inspection of Records. A shareholder, if he is entitled and
--------- ---------------------
demands to inspect the records of the corporation pursuant to any statutory or
other legal right, shall be privileged to inspect such records only during the
usual and customary hours of business and in such manner as will not unduly
interfere with the regular conduct of the business of the corporation. In order
to exercise this right of examination, a shareholder must make written demand
upon the corporation, stating with particularity the records sought to be
examined and the purpose therefor. A shareholder may delegate his right of
inspection to his representative on the condition that, if the representative is
not an attorney, the shareholder and representative agree with the corporation
to furnish to the corporation, promptly as completed or made, a true and correct
copy of each report with respect to such inspection made by such representative.
No shareholder shall use or permit to be used or acquiesce in the use by other
of any information so obtained, to the detriment competitively of the
corporation, nor shall he furnish or permit to be furnished any information so
obtained to any competitor or prospective competitor of the corporation.
The corporation may, as a condition precedent to any shareholder's
inspection of the record of the corporation, require the shareholder to
By-Laws of Mid-Missouri Holding, Inc.
Adopted January 24, 1994 Page 1
<PAGE>
indemnify the corporation against any loss or damage which may be suffered by it
arising out of or resulting from any unauthorized disclosure made or permitted
to be made by such shareholder or any representative or financial advisor of the
shareholder of information obtained in the course of such inspection. The
corporation may, as a further condition precedent to any shareholder's
inspection of the records of the corporation, also require the shareholder to
execute and deliver to the corporation a confidentiality agreement in which the
shareholder: (i) acknowledges that the corporation is engaged in a highly
competitive economic environment, that the nonpublic records of the corporation
would suffer material adverse financial consequences if competitors or other
entities with which the corporation does business should gain access to
nonpublic information contained in the records of the corporation; (ii) agrees
that he will not, directly or indirectly, without the corporation's prior
written consent, disclose any nonpublic information obtained from the records of
the corporation to any party other than the shareholder's representative or
personal financial advisor; and (iii) agrees to instruct his representative and
any personal financial advisor not to disclose, directly or indirectly, without
the corporation's prior written consent, any such nonpublic information received
and that no applicable professional-client privileges shall be waived. The
corporation may also require any representative or personal financial advisor of
a shareholder to sign a confidentiality agreement containing substantially the
provisions described above as a condition precedent to inspection of the records
of the corporation. As used herein, "nonpublic" information is all information
other than: (a) what the corporation has filed with a governmental agency and
which (i) was not designated as confidential, secret, proprietary, or the like
and (ii) is generally open to public inspection in accordance with applicable
laws, rules, and regulations; and (b) what the corporation has released to the
press and other media for general publication.
ARTICLE II
Corporate Seal
--------------
Section 1. Corporate Seal. The corporate seal, if any, shall have
--------- --------------
inscribed thereon the name of the corporation and the words: Corporate Seal--
Missouri. Said seal may be used by causing it or a facsimile thereof to be
impressed or affixed or in any manner reproduced.
ARTICLE III
Shareholders
------------
Section 1. Place of Meetings. All meetings of the shareholders shall
--------- -----------------
beheld at the principal business office of the corporation, except such meetings
as the Board of Directors to the extent permissible by law expressly determines
shall be held elsewhere, in which case such meetings may be held, upon notice
thereof as herein provided, at such other place or places, within or without the
State of Missouri, as said Board of Directors shall determine and as shall be
stated in such notice; and, unless specifically prohibited by law, any meeting
may be held at any
By-Laws of Mid-Missouri Holding, Inc.
Adopted January 24, 1994 Page 2
<PAGE>
place and time, and for any purpose if consented to in writing by all of the
shareholders entitled to vote thereat.
Section 2. Annual Meeting. An annual meeting of shareholders shall be
--------- --------------
held on the first Monday in January of each year, if not a legal holiday, and if
a legal holiday then on the next business day following, at 10:00 a.m. when the
shareholders shall elect directors to succeed those whose terms expire and
transact such other business as may properly be brought before the meeting.
Section 3. Special Meetings. Special meetings of the shareholders may be
---------- ----------------
called by the Chairman of the Board (if any), the President, or by the Board of
Directors, and shall be held on such date and at such time as he or they shall
fix.
The holders of not less than one-fifth of all of the issued and outstanding
shares of the corporation entitled to vote for the election of directors may
also call a special meeting of the shareholders by affixing their signatures to
a written notice given as otherwise provided herein, which notice shall fix the
date and time of such meeting.
Section 4. Action in Lieu of Meeting. Any action required to be taken at
--------- -------------------------
a meeting of the shareholders or any other action which maybe taken at a meeting
of the shareholders may be taken without a meeting if consents in writing
setting forth the action so taken shall be signed by all of the shareholders
entitled to vote with respect to the subject matter thereof.
Section 5. Notice of Meetings. Written or printed notice stating the
--------- ------------------
place, day and hour of the meeting and, in the case of a special meeting, the
purpose or purposes for which the meeting is called, shall be given not less
than ten nor more than fifty days before the date of the meeting, either
personally or by mail, by or at the direction of the Board of Directors, the
Chairman of the Board (if any), the President, or the Secretary, to each
shareholder of record entitled to vote at such meeting. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail in a
sealed envelope addressed to the shareholder at his address as it appears on the
records of the corporation, with postage thereon prepaid.
Section 6. Presiding Officials. Every meeting of the shareholders for
---------- -------------------
whatever object, shall be convened (in the order shown, unless otherwise
determined by resolution of the Board of Directors) by the Chairman of the Board
(if any), or by the President, or by the officer who called the meeting by
notice as above provided; but it shall be presided over by the officers
specified elsewhere in these By-laws.
Section 7. Waiver of Notice. Whenever any notice is required to be given
--------- ----------------
under the provisions of these By-laws, the Articles of Incorporation of the
corporation, or any law, a waiver thereof in writing signed by the person or
persons entitled to such notice, whether before, at, or after the time stated
therein, shall be deemed the equivalent of the giving of
By-Laws of Mid-Missouri Holding, Inc.
Adopted January 24, 1994 Page 3
<PAGE>
such notice. To the extent provided by law, attendance at any meeting shall
constitute a waiver of notice of such meeting.
Section 8. Business Transacted at Annual Meetings. At each annual meeting
--------- --------------------------------------
of the shareholders, the shareholders shall elect a Board of Directors to hold
office until the next succeeding annual meeting, or, in the case of a classified
Board of Directors, the shareholders shall elect Directors to fill those
director positions the terms of which are set to expire at that annual meeting
of shareholders; and they may transact such other business as may be desire,
whether or not the same was specified in the notice of the meeting, unless the
consideration of such other business without its having been specified in the
notice of the meeting as one of the purposes thereof is prohibited by law.
Section 9. Business Transacted at Special Meetings. Business transacted
--------- ---------------------------------------
at all special meetings of the shareholders shall be confined to the purposes
stated in the notice of such meetings, unless the transaction of other business
is consented to by the holders of all of the outstanding shares of stock of the
corporation entitled to vote thereat.
Section 10. Quorum. Except as may be otherwise provided by law or by the
---------- ------
Articles of Incorporation, the holders of a majority of the voting shares issued
and outstanding and entitled to vote for the election of directors, whether
present in person or by proxy, shall constitute a quorum for the transaction of
business at all meetings of the shareholders. Every decision of a majority in
amount of shares of such quorum shall be valid as a corporate act, except in
those specific instances in which a larger vote is required by law, by these By-
laws, or by the Articles of Incorporation. If, however, such quorum should not
be present at any meeting, the shareholders present and entitled to vote shall
have the power successively to adjourn the meeting, without notice other than
announcement at the meeting, to a specified date not longer than ninety days
after such adjournment. At any such adjourned meeting at which a quorum is
present any business may be transacted which might have been transacted at the
meeting of which the shareholders were originally notified. However, if the
adjournment is for more than thirty days, or if after the adjournment a new
record date is fixed for the adjourned meeting, notice of the adjourned meeting
shall be given in the manner otherwise provided herein to each shareholder of
record entitled to vote at such adjourned meeting. Withdrawal of shareholders
from any meeting shall not cause the failure of a duly constituted quorum at
such meeting.
Section 11. Proxies. At any meeting of the shareholders every shareholder
---------- -------
having the right to vote shall be entitled to vote in person, or by vesting
another person with authority to exercise the voting power of any or all of his
stock by executing in writing any voting trust agreement, proxy, or any other
type of appointment form or agreement, except as may be expressly limited by law
or by the Articles of Incorporation. Any copy, facsimile telecommunication, or
other reliable reproduction of any writing referred to in this Section may be
used in lieu of the original writing for any and all purposes for which the
By-Laws of Mid-Missouri Holding, Inc.
Adopted January 24, 1994 Page 4
<PAGE>
original writing could be used, provided that such copy, facsimile
telecommunication, or other reproduction shall be a complete reproduction of the
entire original writing. No proxy shall be valid after eleven months from the
date of its execution, unless otherwise provided in the proxy.
Section 12. Voting. Each shareholder shall have one vote (or such other
---------- ------
number of votes as may be specifically provided) for each share of stock
entitled to vote under the provisions of the Articles of Incorporation which is
registered in his name on the books of the corporation; but in the election of
directors, cumulative voting shall prevail; that is to say, each shareholder
shall have the right to cast as many votes in the aggregate as shall equal the
number of voting shares so held by him, multiplied by the number of directors to
be elected at such election, and he may cast the whole number of such votes for
any one or more candidates. Directors shall not be elected at such election,
and he may cast the whole number of such votes for any one or more candidates.
Directors shall not be elected in any other manner, unless such cumulative
voting be unanimously waived by all shareholders present, in person or by proxy,
and such waiver is permitted by law. All other matters, except as required by
law or the Articles of Incorporation, shall be determined by a majority of the
votes cast. Any shareholder who is in attendance at a meeting of the
shareholders either in person or by proxy, but who abstains from voting on any
matter, shall not be deemed present or represented at such meeting for purposes
of the preceding sentence with respect to such vote, but shall be deemed present
or represented for all other purposes.
The rights and powers of the holders of any class or series of preferred
stock with respect to the election of directors shall be only as may be duly
designated with respect to such class or series and as is consistent with the
provisions of the Articles of Incorporation.
No person shall be permitted to vote any shares belonging to the
corporation.
Shares standing in the name of another corporation, domestic or foreign,
may be voted by such officer, agent, or proxy as the by-laws of such corporation
may prescribe, or, in the absence of such provision, as the board of directors
of such corporation may determine.
Shares standing in the name of a deceased person may be voted by his
personal representative either in person or by proxy. Shares standing in the
name of a conservator or trustee may be voted by such fiduciary, either in
person or by proxy, but no conservator or trustee shall be entitled as such
fiduciary to vote shares held by him without transfer of such shares into his
name.
Shares standing in the name of a receiver, and shares held by or under the
control of a receiver may be voted by such receiver without the transfer thereof
into his name if authority to do so is contained in an appropriate order of the
court by which such receiver was appointed.
By-Laws of Mid-Missouri Holding, Inc.
Adopted January 24, 1994 Page 5
<PAGE>
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledge, and
thereafter the pledgee shall be entitled to vote the shares transferred.
Shares standing in the names of two or more persons shall be voted or
represented in accordance with the vote or consent of a majority of the persons
in whose names the shares are registered. If only one such person is present in
person or by proxy, he may vote all of the shares, and all of the shares
standing in the names of such persons shall be deemed represented for purposes
of determining a quorum. The foregoing provisions shall also apply to shares
held by two or more personal representatives, trustees, or other fiduciaries
unless the instrument or order appointing them otherwise directs.
Section 13. Registered Shareholders. The corporation shall be entitled to
---------- -----------------------
treat the holder of any share or shares of stock of the corporation, as recorded
on the stock record or transfer books of the corporation, as the holder of
record and as the holder and owner in fact thereof and, accordingly, shall not
be required to recognize any equitable or other claim to or interest in such
share(s) on the part of any other person, firm, partnership, corporation or
association, whether or not the corporation shall have express or other notice
thereof, save as is otherwise expressly required by law, and the term
"shareholder" as used in these By-laws means one who is a holder of record of
shares of the corporation; provided, however, that if permitted by law:
Shares standing in the name of another corporation, domestic or
foreign, may be voted by such officer, agent or proxy as the By-laws of
such corporation prescribe, or, in the absence of such provision, as the
Board of Directors of such corporation may determine;
Shares standing in the name of a deceased person may be voted by his
administrator or person representative, either in person or by proxy; and
shares standing in the name of a guardian, curator, or trustee may be voted
by such fiduciary, either in person or by proxy; but no guardian, curator,
or trustee shall be entitled, as such fiduciary, to vote shares held by him
without a transfer of such shares into his name;
A shareholder whose shares are pledged shall be entitled to vote such
share until the shares have been transferred of record into the name of the
pledgee, and thereafter the pledgee shall be entitled to vote the shares so
transferred.
Section 14. Shareholders Lists. A complete list of the shareholders
---------- ------------------
entitled to vote at each meeting of the shareholders, arranged in alphabetical
order, with the address of, and the number of voting shares held by each, shall
be prepared by the officer of the corporation having charge of the stock
transfer books of the corporation, and shall for a period of ten days prior to
the meeting be kept on file in the registered
By-Laws of Mid-Missouri Holding, Inc.
Adopted January 24, 1994 Page 6
<PAGE>
office of the corporation in Missouri, and shall at any time during the usual
hours for business be subject to inspection by any shareholder. A similar or
duplicate list shall also be produced and kept open for the inspection of any
shareholder during the whole time of the meeting. The original share ledger or
transfer book, or a duplicate thereof kept in the State of Missouri, shall be
prima facie evidence as to who are shareholders entitled to examine such list,
ledger, or transfer book or to vote at any meeting of shareholders. Failure to
comply with the foregoing shall not affect the validity of any action taken at
any such meeting.
Section 15. Removal of Directors. Except as otherwise provided the
---------- --------------------
Articles of Incorporation or by law, the shareholders shall have the power by an
affirmative vote to a majority of the outstanding shares then entitled to vote
for the election of directors at any regular meeting or special meeting
expressly called for that purpose, to remove any director from office with or
without cause. Such meeting shall be held at any place prescribed by law or at
any other place which may, under law, permissibly be, and which is, designated
in the notice of the special meeting. If cumulative voting applies to the
election of directors and if less than the entire Board is to be removed, no one
of the directors may be removed if the votes cast against his removal would be
sufficient to elect him if then cumulatively voted at an election of the entire
Board of Directors.
ARTICLE IV
Directors
---------
Section 1. Qualifications and Number. Each director shall be a natural
--------- -------------------------
person who is at least eighteen years of age. A director need not be a
shareholder, a citizen of the United States, or a resident of the State of
Missouri unless required by law or the Articles of Incorporation.
Unless and until changed, the number of directors to constitute the full
Board of Directors shall be the same number as is provided for the first Board
in the Articles of Incorporation. The Board of Directors, if, to the extent,
and in such manner as may be permitted by the Articles of Incorporation and by
law, in which case any notice required by law of any such change shall be duly
given. If the power to change these by-law provisions concerning the number of
directors is not granted to the Board of Directors, such power shall be
exercised by such vote of the shareholders entitled to vote as may be required
in the Articles of Incorporation; and if no specific vote of the shareholders is
required, then by a majority of the shareholders then entitled to vote.
Section 2. Powers of the Board. The property and business of the
--------- -------------------
Corporation shall be managed by the directors, acting as a Board. The Board
shall have an d is vested with all and unlimited powers and authorities, except
as may be expressly limited by law, the Articles of Incorporation, or by these
By-laws, to do or cause to be done any and all lawful things for and on behalf
of the corporation (including, without limitation, the declaration of dividends
on the outstanding shares of the
By-Laws of Mid-Missouri Holding, Inc.
Adopted January 24, 1994 Page 7
<PAGE>
corporation and the payment thereof in cash, property or shares), and to
exercise or cause to be exercised any or all of its powers, privileges and
franchises, and to seek the effectuation of its objects and purposes.
Section 3. Annual Meeting of the Board, Notice. Any continuing members
--------- -----------------------------------
and the newly elected members of the Board shall meet: (i) immediately
following the conclusion of the annual meeting of the shareholders for the
purpose of electing officers and for such other purposes as may come before the
meeting, and the time and place of such meeting shall be announced at the annual
meeting of the shareholders by the chairman of such meeting, and no other notice
to any continuing or the newly elected directors shall be necessary in order to
legally constitute the meeting, provided a quorum of the directors shall be
present; or (ii) if no meeting immediately following the annual meeting of
shareholders is announced, at such time and place, either within or without the
State of Missouri, as may be suggested or provided for by resolution of the
shareholders at their annual meeting and no other notice of such meeting shall
be necessary to the newly elected directors in order to legally constitute the
meeting, provided a quorum of the directors shall be present; or (iii) if not so
suggested or provided for by resolution of the shareholders or if a quorum of
the directors shall not be present, at such time and place as may be consented
to in writing by a majority of any continuing and the newly elected directors,
provided that written or printed notice of such meeting shall be given to each
of any continuing and the newly elected directors in the same manner as provided
in these By-laws with respect to the notice for special meetings of the Board,
except that it shall not be necessary to state the purpose of the meeting in
such notice; or (iv) regardless of whether or not the time and place of such
meeting shall be suggested or provided for by resolution of the shareholders at
the annual meeting, at such time and place as may be consented to in writing by
all of any continuing and the newly elected directors. Each director, upon his
election, shall qualify by accepting the office of director, and his attendance
at, or his written approval of the minutes of, any meeting of the newly elected
directors shall constitute his acceptance of such office; or he may execute such
acceptance by a separate writing, which shall be placed in the minute book.
Section 4. Regular Meetings, Notice. Regular meetings of the Board may be
--------- ------------------------
held at such times and places either within or without the State of Missouri as
shall from time to time be fixed by resolution adopted by a majority of the full
Board of Directors. No notice of any regular meeting need be given other than
by announcement at the immediately preceding regular meeting and communicated in
writing to all absent directors; provided, however, that written notice of any
regular meeting of the Board of Directors stating the place, day, and hour of
such meeting shall be given if required by resolution adopted by the Board of
Directors. Any business may be transacted at a regular meeting. Neither the
business to be transacted at nor the purpose need be specified in any notice or
waiver of notice of any regular meeting of the Board of Directors.
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<PAGE>
Section 5. Special Meetings, Notice. Special meetings of the Board may be
--------- ------------------------
called at any tie by the Chairman of the Board (if any), the President, or by
one-third of the directors (rounded up to the nearest whole number). The place
may be within or without the State of Missouri as designated in the notice.
Written notice of each special meeting of the Board, stating the place,
day, and hour of the meeting shall be given to each director at least two days
before the date on which the meeting is to be held. The notice shall be given
(i) in the manner provided for in these By-laws or (ii) may be given
telephonically, if confirmed promptly in writing, in which case the notice shall
be deemed to have been given at the time of telephonic communication. The
notice may be given by any officer directed to do so by any officer having
authority to call the meeting or by the director(s) who have called the meeting.
Neither the business to be transacted at nor the purpose need be specified
in the notice or any waiver of notice of any special meeting of the Board of
Directors.
Section 6. Action in Lieu of Meetings. Unless otherwise restricted by the
--------- --------------------------
Articles of Incorporation or by By-laws or by law, any action required to be
taken at a meeting of the Board of Directors or any other action which may be
taken without a meeting of the Board of Directors may be taken without a meeting
if a consent in writing setting forth the action so taken shall be signed by all
the directors entitled to vote with respect to the subject matter thereof. Any
such consent signed by all the directors shall have the same effect as a
unanimous vote and may be stated as such in any document describing the action
taken by the Board of Directors.
Section 7. Meeting by Conference Telephone or Similar Communications
--------- ---------------------------------------------------------
Equipment. Unless otherwise restricted by the Articles of Incorporation or
- ---------
these By-laws or by law, members of the Board of Directors of the corporation,
or any committee designated by such Board, may participate in a meeting of such
Board or committee by means of conference telephone or similar communications
equipment whereby all persons participating in the meeting can hear each other,
and participation in a meeting in such manner shall constitute presence in
person at such meeting.
Section 8. Quorum. At all meetings of the Board a majority of the full
--------- ------
Board of Directors shall, unless a greater number as to any particular matter is
required by the Articles of Incorporation or these By-laws, constitute a quorum
for the transaction of business. The act of a majority of the directors present
at any meeting at which there is a quorum, except as may be otherwise
specifically provided by law, by the Articles of Incorporation, or by these By-
laws, shall be the act of the Board of Directors. A director who is in
attendance at a meeting of the Board of Directors but who abstains from voting
on a matter shall not be deemed present at such meeting for purposes of the
preceding sentence with respect to such vote, but shall be deemed present at
such meeting for all
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Adopted January 24, 1994 Page 9
<PAGE>
other purposes. Withdrawal by a director from any meeting at which a duly
constituted quorum is present shall not cause the failure of the quorum.
Less than a quorum may adjourn a meeting successively until a quorum is
present, and no notice of adjournment shall be required.
Section 9. Waiver of Notice; Attendance at Meeting. Any notice provided
--------- ---------------------------------------
or required to be given to the directors may be waived in writing by any of
them, whether before, at, or after the time stated therein.
Attendance of a director at any meeting shall constitute a waiver of notice
of such meeting except where the director attends for the express purpose, and
so states at the opening of the meeting, of objecting to the transaction of any
business because the meeting is not lawfully called or convened.
Section 10. Vacancies. If the office of any director is or becomes vacant
---------- ---------
by reason of death, resignation, or due to an increase in the number of
directors, a majority of the survivors or remaining directors, though less than
a quorum, may appoint a director to fill the vacancy until a successor shall
have been duly elected at a shareholders' meeting.
Section 11. Executive Committee. The Board of Directors may, by
---------- -------------------
resolution passed by a majority of the full Board, designate an executive
committee, such committee to consist of two or more directors of the
corporation. Such committee, except to the extent limited in said resolution,
shall have and may exercise all of the powers of the Board of Directors in the
management of the corporation. The members constituting the executive committee
shall be determined from time to time by resolution adopted by a majority of the
full Board; and any director may vote for himself as a member of the executive
committee. In no event, however, shall the executive committee have any
authority to amend the Articles of Incorporation, to adopt any plan of merger or
consolidation with another corporation or corporations, to recommend to the
shareholders the sale, lease, exchange, mortgage, pledge, or other disposition
of all or substantially all of the property and assets of the corporation if not
made in the usual and regular course of its business, to recommend to the
shareholders a voluntary dissolution of the corporation or a revocation thereof,
to amend, alter or repeal the By-laws of the corporation, to elect or remove
officers of the corporation or members of the executive committee, to fix the
compensation of any member of the executive committee, to declare any dividend,
or to amend, alter or repeal any resolution of the Board of Directors which by
its terms provides that it shall not be amended, altered or repealed by the
executive committee.
The executive committee shall keep regular minutes of its proceedings and
the same shall be recorded in the minute book of the corporation. The Secretary
or an Assistant Secretary of the corporation may act as secretary for the
executive committee if the executive committee so requests.
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<PAGE>
Section 12. Other Committees. The Board of Directors may, by resolution
---------- ----------------
passed by a majority of the full Board, designate one or more standing or ad hoc
committees, each committee to consist of two or more of the directors of the
corporation and such other person(s) as may be appointed as advisory members
under authority provided in the resolution. Each such committee, to the extent
provided in the resolution and permitted by law, shall have and may exercise the
power of the Board of Directors. The members constituting each such committee
shall be determined from time to time by resolution adopted by a majority of the
full Board; and any director may vote for himself as a member of any such
committee.
Each such committee shall, to the extent required by resolution of the
Board of Directors (or, in the absence of any such resolution, to the extent a
majority of its members determines is appropriate) keep minutes of its
proceedings and the same shall be recorded in the minute book of the
corporation. The Secretary or Assistant Secretary of the corporation may act as
secretary for any such committee if the committee so requests.
Section 13. Compensation of Directors and Committee Members. Directors
---------- -----------------------------------------------
and members of all committees shall receive such compensation for their services
as may be determined from time to time by resolution adopted from time to time
by the Board, as well as such expenses, if any, as may be allowed pursuant to
resolution adopted from time to time by the Board. No such resolution shall be
deemed voidable or invalid by reason of the personal or pecuniary interest of
the directors or any director in adopting it. Nothing herein contained shall be
construed to preclude any director or committee member from serving the
corporation in any other capacity and receiving compensation therefor.
Section 14. Protection of Director for Reliance on Corporate Records. No
---------- --------------------------------------------------------
director shall be liable for dividends legally declared, distributions legally
made to shareholders, or any other action taken in reliance in good faith upon
financial statements of the corporation represented to him to be correct by the
Chairman of the Board (if any), the President or the officer of the corporation
having charge of the books of account, or certified by an accountant to fairly
represent the financial condition of the corporation; nor shall any such
director be liable for determining in good faith the amount available for
dividends or distributions by considering the assets to be of their book values.
ARTICLE V
Officers
--------
Section 1. Officers -- Who Shall Constitute. The officers of the
--------- --------------------------------
corporation shall be a Chairman of the Board, a President, one or more Vice
Presidents, a Secretary, a Treasurer, one or more Assistant Secretaries, and one
or more Assistant Treasurers. The Board shall elect or appoint a Chairman of
the Board, President and Secretary at its first meeting and at each annual
meeting of the Board of Directors which shall follow the annual meeting of the
shareholders. The Board then, or from time to time, may also elect to appoint
one or more of the other
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<PAGE>
prescribed officers as its shall deem advisable, but need not elect or appoint
any officers other than a President and a Secretary. The Board may, if it
desires, further identify or describe any one or more of such officers.
An officers need not be a shareholder unless required by law or the
Articles of Incorporation. Any two or more of such offices may be held by the
same person.
An officer shall be deemed qualified when he enters upon the duties of the
office to which he has been elected or appointed and furnishes any bond required
by the Board; but the Board may also require of such person his written
acceptance and promise faithfully to discharge the duties of such office.
Section 2. Term of Office. Each officer of the corporation shall hold his
--------- --------------
office for the term for which he was elected, or until he resigns or is removed
by the Board, whichever first occurs.
Section 3. Appointment of Officers and Agents -- Terms of Office. The
--------- -----------------------------------------------------
Board from time to time may also appoint such other officers and agents for the
corporation as it shall deem necessary or advisable. All appointed officers and
agents shall hold their respective positions at the pleasure of the Board or for
such terms as the Board may specify, and they shall exercise such powers and
perform such duties as shall be determined from time to time by the Board, or by
an elected officer empowered by the Board to make such determination.
Section 4. Removal. Any officer or agent elected or appointed by the
--------- -------
Board of Directors, and any employee, may be removed or discharged by the Board
whenever in its judgment the best interests of the corporation would be served
thereby, but such removal shall be without prejudice to the contract rights, if
any, of the person so removed. Election or appointment of an officer or agent
shall not of itself create contract rights.
Section 5. Salaries and Compensation. Salaries and compensation of all
--------- -------------------------
elected officers of the corporation shall be fixed, increased or decreased by
the Board of Directors, but this power may, unless prohibited by law, be
delegated by the Board to the Chairman of the Board (if any) or to the President
(except as to their own compensation), or to a committee. Salaries and
compensation of all other appointed officers and agents, and employees of the
corporation, may be fixed, increased or decreased by the Board of Directors or a
committee thereof, but until action is taken with respect thereto by the Board
of Directors or a committee thereof, the same may be fixed, increased or
decreased by the Chairman of the Board (if any), the President, or by such other
officer or officers as may be empowered by the Board of Directors or a committee
thereof to do so.
Section 6. Delegation of Authority to Hire, Discharge, Etc. The Board,
--------- ------------------------------------------------
from time to time, may delegate to the Chairman of the Board (if
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<PAGE>
any), the President, or any other officer or executive employee of the
corporation, authority to hire, discharge, and fix and modify the duties,
salary, or other compensation of employees of the corporation under their
jurisdiction; and the Board may delegate to such officer or executive employee
similar authority with respect to obtaining and retaining for the corporation
the services of attorneys, accountants, and other experts.
Section 7. The Chairman of the Board and the President. The Chairman of
--------- -------------------------------------------
the Board shall be the chief executive officer of the corporation. The
President shall be the chief operating officer of the corporation. Except as
otherwise provided for in these By-laws, the Chairman of the Board, or in his
absence the President, shall preside at all meetings of the shareholders and of
the Board of Directors. Both shall have general and active management of the
business of the corporation and shall carry into effect all directions and
resolutions of the Board.
Either may executive all bonds, notes, debentures, mortgages and other
contracts requiring a seal, under the seal of the corporation, and may cause the
seal to be affixed thereto, and all other instruments for and in the name of the
corporation, except that if, by law, such instruments are required to be
executed only by the President, he shall execute them.
Either, when authorized to do so by the Board, may execute powers of
attorney from, for, and in the name of the corporation, to such proper person or
persons as he may deem fit, in order that thereby the business of the
corporation may be furthered or action taken as may be deemed by him necessary
or advisable in furtherance of the interests of the corporation.
Either, except as may be otherwise directed by the Board, shall be
authorized to attend meetings of the shareholders of other corporations to
represent this corporation thereat and to vote or take action with respect to
the shares of any such corporation owned by this corporation in such manner as
he shall deem to be for the interest of the corporation or as may be directed by
the Board.
The Chairman of the Board and, in his absence, the President, shall, unless
the Board otherwise provides, be ex officio a member of all standing committees.
Each of said officers shall have such general executive powers and duties of
supervision and management as are usually vested in the office of a managing
executive of a corporation, provided that the President shall report to and
follow the directives of the Chairman of the Board.
Each shall have such other or further duties and authority as may be
prescribed elsewhere in these By-laws or from time to time by the Board of
Directors, and the Board may from time to time divide the responsibilities,
duties, and authority between them to such extent as it may deem advisable.
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<PAGE>
Notwithstanding anything to the contrary herein stated, the Chairman of the
Board shall not be authorized to do any act required by law to be done by the
President of the corporation until written notice of his designation as chief
executive officer, attested to by the Secretary of the corporation, has been
filed in writing with the Secretary of State of Missouri.
Section 8. Vice Presidents. The Vice Presidents, in the order of their
--------- ---------------
seniority as determined by the Board, shall, in the absence, disability or
inability to act of the Chairman of the Board and the President, perform the
duties and exercise the powers of the Chairman of the Board and the President,
and shall perform such other duties as the Board of Directors shall from time to
time prescribe.
Section 9. The Secretary and Assistant Secretaries. The Secretary shall
--------- ---------------------------------------
attend all sessions of the Board and except as otherwise provided for in these
By-laws, all meetings of the shareholders, and shall record or cause to be
recorded all votes taken and the minutes of all proceedings in a minute book of
the corporation to be kept for that purpose. The Secretary shall perform like
duties for the executive and other standing committees when requested by the
Board or such committee to do so.
The Secretary shall have the principal responsibility to give, or cause to
be given, notice of all meetings of the shareholders and of the Board of
Directors, but this shall not lessen the authority of others to give such notice
as is authorized elsewhere in these By-laws.
The Secretary shall see that all books, records, lists and information, or
duplicates, required to be maintained at the registered office or at some office
of the corporation in Missouri, or elsewhere, are so maintained.
The Secretary shall keep in safe custody the seal of the corporation, and
when duly authorized to do so, shall affix the same to any instrument requiring
it, and when so affixed, shall attest the same by his signature.
The Secretary shall perform such other duties and have such other authority
as may be prescribed elsewhere in these By-laws or from time to time by the
Board of Directors or the President, under whose direct supervision the
Secretary shall be.
The Secretary shall have the general duties, powers and responsibilities of
a Secretary of a corporation.
The Assistant Secretaries, in the order of their seniority, in the absence,
disability, or in ability to act of the Secretary, shall perform the duties and
exercise the powers of the Secretary, and shall perform such other duties as the
Board may from time to time prescribe.
Section 10. The Treasurer and Assistant Treasurers. The Treasurer shall
---------- --------------------------------------
have the responsibility for the safekeeping of the funds and securities of the
corporation, and shall keep or cause to be kept full and
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<PAGE>
accurate accounts of receipts and disbursements in books belonging to the
corporation. The Treasurer shall keep, or cause to be kept, all other books of
account and accounting records of the corporation, and shall deposit or cause to
be deposited all moneys and other valuable effects in the name and to the credit
of the corporation in such depositories as may be designated by the Board of
Directors.
The Treasurer shall disburse, or permit to be disbursed, the funds of the
corporation as may be ordered, or authorized generally, by the Board and shall
render to the chief executive officer of the corporation and the directors,
whenever they may require it, an account of all his transactions as Treasurer
and of those under his jurisdiction, and of the financial condition of the
corporation.
The Treasurer shall perform such other duties and shall have such other
responsibility and authority as may be prescribed elsewhere in these By-laws or
from time to time by the Board of Directors.
The Treasurer shall have the general duties, powers and responsibility of a
Treasurer of a corporation, and shall be the chief financial and accounting
officer of the corporation.
If required by the Board, the Treasurer shall give the corporation a bond
in a sum and with one or more sureties satisfactory to the Board for the
faithful performance of the duties of his office, and for the restoration to the
corporation, in the case of his death, resignation, retirement, in the case of
his death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control which belong to the corporation.
The Assistant Treasurers in the order of their seniority shall, in the
absence, disability or inability to act of the Treasurer, perform the duties and
exercise the powers of the Treasurer, and shall perform such other duties as the
Board of Directors shall from time to time prescribe.
Section 11. Bond. At the option of the Board of Directors, any officer
---------- ----
may be required to give bond for the faithful performance of his duties.
Section 12. Checks and Other Instruments. All checks, drafts, notes,
---------- ----------------------------
acceptances, bills of exchange and other negotiable and non-negotiable
instruments and obligations for the payment of money, and all contracts, deeds,
mortgages and all other papers and documents whatsoever, unless otherwise
provided for by these By-laws, shall be signed by such officer or officers or
such other person or persons and in such manner as the Board of Directors from
time to time shall designate. If no such designation is made, and unless and
until the Board otherwise provides, the Chairman of the Board (if any) or the
President and the Secretary, of the Chairman of the Board (if any) or the
President and the Treasurer, shall have power to sign all such instruments for,
and on behalf of and
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<PAGE>
in the name of the corporation, which are executed or made in the ordinary
course of the corporation's business.
Section 13. Duties of Officers May be Delegated. If any officer of the
---------- -----------------------------------
corporation shall be absent or unable to act, or for any other reason the Board
may deem sufficient, the Board may delegate, for the time being ,some or all of
the functions, duties, powers and responsibilities of any officer to any other
officer, or to any other agent or employee of the corporation or other
responsible person, provided a majority of the then sitting Board concurs
therein.
ARTICLE VI
Shares of Stock
---------------
Section 1. Payment for Shares of Stock. The corporation shall not issue
--------- ---------------------------
shares of stock except for (i) money paid, (ii) labor done or services actually
received, or (iii) property actually received; provided, however, that shares
may also be issued, (iv) in consideration of the cancellation of valid bona fide
antecedent debts, (v) as stock dividends, (vi) pursuant to stock splits, reverse
stock splits, stock combinations, reclassifications of outstanding shares into
shares of another class or classes, exchanges of outstanding shares for shares
of another class or classes, or (vii) other bona fide changes respecting
outstanding shares. No note or obligation given by any shareholder, whether
secured by deed of trust, mortgage or otherwise shall be considered as payment
of any part of any share or shares.
Section 2. Certificates for Shares of Stock. The certificates for shares
--------- --------------------------------
of stock of the corporation shall be numbered, shall be in such form as may be
prescribed by the Board of Directors in conformity with law, and shall be
entered in the stock books of the corporation as they are issued, and such
entries shall show the name and address of the person, firm, partnership,
corporation or association to whom each certificate is issued. Each certificate
shall have printed, typed or written thereon the name of the person, firm
partnership, corporation, or association to whom it is issued, and number of
shares represented thereby and shall be signed by the Chairman of the Board (if
any) or the President or a Vice President, and the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary of the corporation and
sealed with the seal of the corporation, which seal may be facsimile, engraved
or printed. If the corporation has a registrar, a transfer agent, or a transfer
clerk who actually signs such certificates, the signature of any of the other
officers above mentioned may be facsimile, engraved, or printed. In case any
such officer who has signed or whose facsimile signature has been placed upon
any such certificate shall have ceased to be such officer before such
certificate is issued, such certificate may nevertheless be issued by the
corporation with the same effect as if such officer were an officer at the date
of its issue.
Section 3. Lost or Destroyed Certificates. In case of the loss or
--------- ------------------------------
destruction of any certificate for shares of stock of the corporation, upon due
proof of the registered owner thereof or his representative, by
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<PAGE>
affidavit of such loss or otherwise, the Chairman of the Board (if any) or the
President and Secretary may issue a duplicate certificate or replacement
certificate in its place, upon the corporation being fully indemnified therefor.
Any such officer may request the posting of an indemnity bond in favor of the
corporation whenever and to the extent that they deem appropriate as a
precondition to the issuance of any duplicate or replacement certificate.
Section 4. Transfers of Shares, Transfer Agent, Registrar. Transfers of
--------- ----------------------------------------------
shares of stock shall be made on the stock record or transfer books of the
corporation only by the person named in the stock certificate, or by his
attorney lawfully constituted in writing, and upon surrender of the certificate
therefor. The stock record book and other transfer records shall be in the
possession of the Secretary (or other person appointed and empowered by the
Board to do so) or of a transfer agent or clerk for the corporation. The
corporation, by resolution of the Board, may from time to time appoint a
transfer agent, and, if desired, a registrar, under such arrangements and upon
such terms and conditions as the Board deems advisable; but until and unless the
Board appoints some other person, firm or corporation as its transfer agent (and
upon the revocation of any such appointment, thereafter until a new appointment
is similarly made) the Secretary of the corporation (or other person appointed
and empowered by the Board) shall be the transfer agent or clerk of the
corporation, without the necessity of any formal action of the Board, and the
Secretary or other person shall perform all of the duties thereof.
Section 5. Closing of Transfer Books, Record Date. The Board of Directors
--------- --------------------------------------
shall have the power to close the stock transfer books of the corporation for a
period not exceeding seventh days preceding the date of any meeting of the
shareholders, or the date for payment of any dividend, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
shares shall go into effect; provided, however, that in lieu of closing the
stock transfer books as aforesaid, the Board of Directors may fix in advance a
date not exceeding seventy days preceding the date of any meeting of
shareholders, or the date for the payment of any dividend, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
shares shall go into effect, as a record date for the determination of the
shareholders entitled to notice of, and to vote at, the meeting or any
adjournment thereof, or entitled to receive payment of the dividends, or
entitled to the allotment of rights, or entitled to exercise the rights in
respect of the change, conversion, or exchange of shares. In such case, only
the shareholders of record on the date of closing of the transfer books or on
the record date so fixed shall be entitled to such notice of, and to vote at,
the meeting, and any adjournment thereof, or to receive payment of the dividend,
or to receive the allotment of rights, or to exercise the rights, as the case
may be, notwithstanding any transfer of any shares on the books of the
corporation after the date of closing of the transfer books or the record date
fixed as aforesaid. If the Board of Directors does not close the transfer books
or set a record date for the determination of the shareholders entitled to
notice of, and to vote at,
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<PAGE>
the meeting, and any adjournment of the meeting, the record date shall be the
date that is twenty days previous to the meeting; except that, if prior to the
meeting written waivers of notice of the meeting are signed and delivered to the
corporation by all of the shareholders of record at the time the meeting is
convened, only the shareholders who are shareholders of record at the time the
meeting is convened shall be entitled to vote at the meeting and at any
adjournment of the meeting. If the Board of Directors does not set a record
date with respect to any dividend, allotment of rights, or exercise of rights in
respect to any dividend, allotment of rights, or exercise of rights in respect
of the change, conversion, or exchange of shares, the record date for such
purpose shall be the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.
Section 6. Fractional Share Interests or Scrip. The corporation may issue
--------- -----------------------------------
fractions of a share and it may issue a certificate for a fractional share, or
by action of the Board of Directors, the corporation may issue in lieu thereof
scrip or other evidence of ownership which shall entitled the holder to receive
a certificate for a full share upon the surrender of such scrip or other
evidence of ownership aggregating a full share. A certificate for a fractional
shares shall (but scrip or other evidence of ownership shall not, unless
otherwise provided by resolution of the Board of Directors) entitle the holder
to all of the rights of a shareholder, including without limitation the right to
exercise any voting right, or to receive dividends thereon or to participate in
any of the assets of the corporation in the event of liquidation. The Board of
Directors may cause such scrip or evidence of ownership (other than a
certificate for a fractional share) to be issued subject to the condition that
it shall become void if not exchanged for share certificates before a specified
date, or subject to the condition that the shares for which such scrip or
evidence of ownership is exchangeable may be sold by the corporation and the
proceeds thereof distributed to the holders of such scrip or evidence of
ownership, or subject to any other condition which the Board of Directors may
deem advisable.
ARTICLE VII
Indemnification
---------------
Section 1. Third Party Actions. The corporation shall indemnify any
--------- -------------------
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, or investigative (other than an action by or in the
right of the corporation) by reason of the fact that he is or was a director or
officer of the corporation, or is or was serving at the request of the
corporation as a director or officer of another corporation, partnership, joint
venture, trust, or other enterprise, against expenses, including attorney fees,
judgments, fines, and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit, or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
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<PAGE>
The termination of any action, suit, or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was unlawful.
Section 2. Actions By or in the Right of the Corporation. The corporation
--------- ---------------------------------------------
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending, or completed action or suit by or in the right
of the corporation to procure a judgment in its favor by reason of the fact that
he is or was a director or officer of the corporation, or is or was serving at
the request of the corporation, as a director or officer of another corporation,
partnership, joint venture, trust, or other enterprise against expenses,
including attorney fees and amounts paid in settlement, actually and reasonably
incurred by him in connection with the defense or settlement of the action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation, except that no
indemnification shall be made in respect of any claim, issue, or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the corporation unless and only to
the extent that the court in which such action or suit was brought determines
upon application that, despite the adjudication of liability and in view of all
the circumstances of the case, the person is fairly and reasonably entitled to
indemnity for such expenses as the court shall deem proper.
Section 3. Indemnity if Successful. To the extent that a director,
--------- -----------------------
officer, employee, or agent of the corporation has been successful on the merits
or otherwise in defense of any action, suit, or proceeding referred to in
Sections 1 and 2 of this Article, or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including attorney fees)
actually and reasonably incurred by him in connection with the action, suit, or
proceeding.
Section 4. Standard of Conduct. Any indemnification under Sections 1 and
--------- -------------------
2 of this Article (unless ordered by a court) shall be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the director or officer is proper in the circumstances
because he has met the applicable standard of conduct set forth in this Article.
The determination shall be made (i) by the Board of Directors by a majority vote
of a quorum consisting of directors who were not parties to such action, suit,
or proceeding, or (ii) if such a quorum is not obtainable, or, even if
obtainable a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, or (iii) by the shareholders by majority vote of
the shares eligible to vote for directors and actually voted, where shares held
by the individual about whom such indemnification is at issue shall not be
eligible to vote.
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<PAGE>
Section 5. Expenses. Expenses incurred in defending a civil or criminal
--------- --------
action, suit, or proceeding may be paid by the corporation in advance of the
final disposition of the action, suit, or proceeding as authorized by the Board
of Directors in the specific case upon receipt of an undertaking by or on behalf
of the director or officer to repay such amount unless it shall ultimately be
determined that he is entitled to be indemnified by the corporation as
authorized in this Article.
Section 6. Nonexclusivity. The indemnification provided by this Article
--------- --------------
shall not be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under the Articles of Incorporation, these By-
laws, or any agreement, vote of the shareholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director or officer and shall inure to the benefit of the
heirs, personal representatives, and administrators of such a person.
Section 7. Further Indemnity Permissible. The corporation shall have the
--------- -----------------------------
power to give further indemnity, in addition to the indemnity authorized or
contemplated under the various sections of this Article, including Section 6
thereof, to any person who is or was a director, officer, employee, or agent, or
to any person who is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, provided such further indemnity is either
(i) authorized, directed, or provided for in the Articles of Incorporation of
the corporation or a duly adopted amendment thereof or (ii) authorized,
directed, or provided for in these By-laws or in any agreement of the
corporation which has been adopted by the shareholders of the corporation, and
provided further that no such indemnity shall indemnify any person from or on
account of such person's conduct which has been finally adjudged to have been
knowingly fraudulent, deliberately dishonest, or willful misconduct. Nothing in
this Section 7 shall be deemed to limit the power of the corporation under
Section 6 of this Article to enact By-laws or to enter into agreements without
shareholder adoption of the same.
Section 8. Insurance. The corporation shall have power to purchase and
----------------------
maintain insurance on behalf of any person who is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the corporation would have the
power to indemnify him against such liability under the provisions of this
Article.
Section 9. Corporation. For the purpose of this Article, references to
------------------------
"the corporation" include all constituent corporations absorbed in a
consolidation or merger as well as the resulting or surviving corporation so
that any person who is or was a director or officer of such a constituent
corporation or is or was serving at the request of such
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<PAGE>
constituent corporation as a director or officer of another corporation,
partnership, joint venture, trust, or other enterprise shall stand in the same
position under the provisions of this Article with respect to the resulting or
surviving corporation as he would if he had served the resulting or surviving
corporation in the same capacity.
Section 10. Other Definitions. For purposes of this Article, the term
-------------------------------
"other enterprise" shall include without limitation employee benefit plans; the
term "fines" shall include without limitation any exercise taxes assessed on a
person with respect to an employee benefit plan; and the term "serving at the
request of the corporation" shall include without limitation any service as a
director, officer, employee, or agent of the corporation which imposes duties
on, or involves services by, such director, oficer, employee, or agent with
respect to an employee benefit plan, its participants, or beneficiaries; and a
person who acted in good faith and in a manner he reasonably believed to be in
the interest of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best interests of
the corporation" as referred to in this Article.
Section 11. Indemnity for Agents and Employees. The corporation may, by
------------------------------------------------
resolution duly adopted by a majority of the disinterested members of the Board
of Directors, grant such indemnity rights and reimbursement for such expenses as
it determines to be appropriate to any person who was or is a party to any
threatened, pending, or completed action or suit, whether civil, criminal,
administrative, or investigative, including any action by or in the right of the
corporation, by reason of the fact that such person is or was an agent or
employee of the corporation, or is or was serving as an agent or employee, at
the request of the corporation, of another corporation, partnership, joint
venture, trust, or other enterprise. Any such grant of indemnification shall be
only to the extent so provided in the resolution granting indemnification, but
shall, in no event, be greater than the rights of indemnification and
reimbursement of expenses granted to directors and officers of this corporation.
ARTICLE VIII
General Provisions
------------------
Section 1. Fixing of Capital, Transfers of Surplus. Except as may be
----------------------------------------------------
specifically otherwise provided in the Articles of Incorporation, the Board of
Directors is expressly empowered to exercise all authority conferred upon it or
the corporation by any law or statute, and in conformity therewith, relative to:
The determination of what part of the consideration received for
shares of the corporation shall be capital;
Increasing capital;
Transferring surplus to capital;
By-Laws of Mid-Missouri Holding, Inc.
Adopted January 24, 1994 Page 21
<PAGE>
The consideration to be received by the corporation for its shares;
and
All similar or related matters;
provided that any concurrent action or consent by or of the corporation and its
shareholders required to be taken or given pursuant to law shall be duly taken
or given in connection therewith.
Section 2. Dividends. Ordinary dividends upon the shares of the
----------------------
corporation, subject to the provisions of the Articles of Incorporation and
applicable law, may be declared by the Board of Directors at any regular or
special meeting. Dividends may be paid in cash, in property, or in shares of
its stock.
Liquidating dividends or dividends representing a distribution of paid-in
surplus or a return of capital shall be made only when and in the manner
permitted by law.
Section 3. Creation of Reserves. Before the payment of any dividend,
---------------------------------
there may be set aside out of any funds of the corporation available for
dividends such sum or sums as the directors from time to time, in their
reasonable discretion, think proper as a reserve fund or funds, to meet
contingencies, or for equalizing dividends, or for repairing or maintaining any
property of the corporation, or for such other purposes as the Board of
Directors shall determine in the best interests of the corporation, and the
Board may abolish any such reserve in the manner in which it was created.
Section 4. Fiscal Year. The Board of Directors shall have the paramount
------------------------
power to fix, and from time to time, to change, the fiscal year of the
corporation. In the absence of action by the Board of Directors, however, the
fiscal year of the corporation shall be determined and signified by the filing
of the Corporation's first federal income tax return, and shall so continue
until such time, if any, as the fiscal year shall be changed by the Board of
Directors.
Section 5. Notices. Except as otherwise specifically provided herein with
--------------------
respect to notice to shareholders or otherwise, or as otherwise required by law,
all notices required to be given by any provision of these By-laws shall be in
writing and shall be deemed to have been given: (i) when received if delivered
in person; (ii) on the date of acknowledgement or confirmation of receipt if
sent by telex, facsimile, or other electronic transmission; (iii) one day after
delivery, properly addressed and fees prepaid, to a reputable courier for same
day or overnight delivery; or (iv) two days after being deposited, properly
addressed and postage prepaid, in the United States mail.
Section 6. Amendments to By-laws. The By-laws of the corporation may from
----------------------------------
time to time be repealed, amended or altered, or new and/or restated By-laws may
be adopted, in either of the following ways:
By-Laws of Mid-Missouri Holding, Inc.
Adopted January 24, 1994 Page 22
<PAGE>
By such vote of the shareholders entitled to vote at any annual or
special meeting thereof as may be required by the Articles of
Incorporation, and if there is no such specific requirement, then by the
vote of a majority of said shareholders; or
By resolution adopted by the Board of Directors if such power shall
have been vested in the Board of Directors by the Articles of
Incorporation; provided, however, that such power shall be exercisable only
by such number or percentage of the Directors as is required by the
Articles of Incorporation, and if thre is no such spcific requirement, then
by a majority of the Board of Directors. Notwithstanding the foregoing,
the Board of Directors shall not have the power to suspend, repeal, amend
or otherwise alter the By-laws or portion thereof enacted by the
shareholders if at the time of such enactment or thereafter the
shareholders shall so expressly provided.
* * * * * * * * *
By-Laws of Mid-Missouri Holding, Inc.
Adopted January 24, 1994 Page 23
<PAGE>
REGULATION S-B EXHIBIT
EXHIBIT 21
<PAGE>
LIST OF THE SUBSIDIARIES
------------------------
OF
--
MID-MISSOURI HOLDING COMPANY, INC.
----------------------------------
ENTITY PERCENT OWNERSHIP
- ------ -----------------
Bank of Sullivan, Sullivan, MO 100%
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 4,308
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 39,414
<INVESTMENTS-CARRYING> 12,375
<INVESTMENTS-MARKET> 12,829
<LOANS> 99,691
<ALLOWANCE> 725
<TOTAL-ASSETS> 162,077
<DEPOSITS> 118,709
<SHORT-TERM> 0
<LIABILITIES-OTHER> 30,328
<LONG-TERM> 0
0
0
<COMMON> 2,314
<OTHER-SE> 10,726
<TOTAL-LIABILITIES-AND-EQUITY> 162,077
<INTEREST-LOAN> 7,723
<INTEREST-INVEST> 2,892
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 10,615
<INTEREST-DEPOSIT> 4,589
<INTEREST-EXPENSE> 1,051
<INTEREST-INCOME-NET> 4,975
<LOAN-LOSSES> 230
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 4,066
<INCOME-PRETAX> 1,626
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,205
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 7.87
<LOANS-NON> 289
<LOANS-PAST> 467
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 512
<CHARGE-OFFS> 118
<RECOVERIES> 101
<ALLOWANCE-CLOSE> 725
<ALLOWANCE-DOMESTIC> 725
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
